Correlation Between Juewei Food and China Construction
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By analyzing existing cross correlation between Juewei Food Co and China Construction Bank, you can compare the effects of market volatilities on Juewei Food and China Construction 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 Juewei Food with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juewei Food and China Construction.
Diversification Opportunities for Juewei Food and China Construction
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Juewei and China is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Juewei Food Co and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Juewei Food 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 Juewei Food Co are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Juewei Food i.e., Juewei Food and China Construction go up and down completely randomly.
Pair Corralation between Juewei Food and China Construction
Assuming the 90 days trading horizon Juewei Food Co is expected to generate 4.91 times more return on investment than China Construction. However, Juewei Food is 4.91 times more volatile than China Construction Bank. It trades about 0.12 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.04 per unit of risk. If you would invest 1,820 in Juewei Food Co on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Juewei Food Co or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juewei Food Co vs. China Construction Bank
Performance |
| Timeline |
| Juewei Food |
| China Construction Bank |
Juewei Food and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juewei Food and China Construction
The main advantage of trading using opposite Juewei Food and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juewei Food position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.| Juewei Food vs. Nanjing Putian Telecommunications | Juewei Food vs. Shenzhen Hifuture Electric | Juewei Food vs. Tianjin Realty Development | Juewei Food vs. Shenyang Huitian Thermal |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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