Correlation Between China Construction and FUJIFILM Holdings
Can any of the company-specific risk be diversified away by investing in both China Construction and FUJIFILM Holdings 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 FUJIFILM Holdings 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 FUJIFILM Holdings, you can compare the effects of market volatilities on China Construction and FUJIFILM Holdings 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 FUJIFILM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and FUJIFILM Holdings.
Diversification Opportunities for China Construction and FUJIFILM Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and FUJIFILM is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and FUJIFILM Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJIFILM Holdings 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 FUJIFILM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJIFILM Holdings has no effect on the direction of China Construction i.e., China Construction and FUJIFILM Holdings go up and down completely randomly.
Pair Corralation between China Construction and FUJIFILM Holdings
Assuming the 90 days horizon China Construction Bank is expected to generate 1.01 times more return on investment than FUJIFILM Holdings. However, China Construction is 1.01 times more volatile than FUJIFILM Holdings. It trades about 0.07 of its potential returns per unit of risk. FUJIFILM Holdings is currently generating about 0.07 per unit of risk. If you would invest 54.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 23.00 from holding China Construction Bank or generate 42.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
China Construction Bank vs. FUJIFILM Holdings
Performance |
| Timeline |
| China Construction Bank |
| FUJIFILM Holdings |
China Construction and FUJIFILM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and FUJIFILM Holdings
The main advantage of trading using opposite China Construction and FUJIFILM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, FUJIFILM Holdings 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 FUJIFILM Holdings will offset losses from the drop in FUJIFILM Holdings' long position.| China Construction vs. CENTURIA OFFICE REIT | China Construction vs. NURAN WIRELESS INC | China Construction vs. LGI Homes | China Construction vs. Diamyd Medical AB |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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