Correlation Between China Construction and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both China Construction and MOVIE GAMES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Construction and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Construction Bank and MOVIE GAMES SA, you can compare the effects of market volatilities on China Construction and MOVIE GAMES 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 Construction with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and MOVIE GAMES.
Diversification Opportunities for China Construction and MOVIE GAMES
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and MOVIE is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and China Construction 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 Construction Bank are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of China Construction i.e., China Construction and MOVIE GAMES go up and down completely randomly.
Pair Corralation between China Construction and MOVIE GAMES
Assuming the 90 days horizon China Construction Bank is expected to generate 0.81 times more return on investment than MOVIE GAMES. However, China Construction Bank is 1.24 times less risky than MOVIE GAMES. It trades about 0.06 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about -0.13 per unit of risk. If you would invest 65.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 12.00 from holding China Construction Bank or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. MOVIE GAMES SA
Performance |
| Timeline |
| China Construction Bank |
| MOVIE GAMES SA |
China Construction and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and MOVIE GAMES
The main advantage of trading using opposite China Construction and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| China Construction vs. Chesapeake Utilities | China Construction vs. AM EAGLE OUTFITTERS | China Construction vs. Playa Hotels Resorts | China Construction vs. Canadian Utilities Limited |
| MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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