Correlation Between China Building and Smartgiant Technology
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By analyzing existing cross correlation between China Building Material and Smartgiant Technology Co, you can compare the effects of market volatilities on China Building and Smartgiant Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Building with a short position of Smartgiant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Smartgiant Technology.
Diversification Opportunities for China Building and Smartgiant Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Smartgiant is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Smartgiant Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartgiant Technology and China Building is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Building Material are associated (or correlated) with Smartgiant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartgiant Technology has no effect on the direction of China Building i.e., China Building and Smartgiant Technology go up and down completely randomly.
Pair Corralation between China Building and Smartgiant Technology
Assuming the 90 days trading horizon China Building Material is expected to under-perform the Smartgiant Technology. But the stock apears to be less risky and, when comparing its historical volatility, China Building Material is 1.7 times less risky than Smartgiant Technology. The stock trades about -0.25 of its potential returns per unit of risk. The Smartgiant Technology Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 4,160 in Smartgiant Technology Co on October 25, 2024 and sell it today you would lose (240.00) from holding Smartgiant Technology Co or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Building Material vs. Smartgiant Technology Co
Performance |
| Timeline |
| China Building Material |
| Smartgiant Technology |
China Building and Smartgiant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Smartgiant Technology
The main advantage of trading using opposite China Building and Smartgiant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building position performs unexpectedly, Smartgiant Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Smartgiant Technology will offset losses from the drop in Smartgiant Technology's long position.| China Building vs. Kweichow Moutai Co | China Building vs. Contemporary Amperex Technology | China Building vs. Beijing Roborock Technology | China Building vs. BYD Co Ltd |
| Smartgiant Technology vs. Kweichow Moutai Co | Smartgiant Technology vs. Contemporary Amperex Technology | Smartgiant Technology vs. Beijing Roborock Technology | Smartgiant Technology vs. BYD Co Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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