Correlation Between China National and CRH PLC
Can any of the company-specific risk be diversified away by investing in both China National and CRH PLC 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 National and CRH PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China National Building and CRH PLC ADR, you can compare the effects of market volatilities on China National and CRH PLC 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 National with a short position of CRH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and CRH PLC.
Diversification Opportunities for China National and CRH PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and CRH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China National Building and CRH PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRH PLC ADR and China National 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 National Building are associated (or correlated) with CRH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRH PLC ADR has no effect on the direction of China National i.e., China National and CRH PLC go up and down completely randomly.
Pair Corralation between China National and CRH PLC
If you would invest 9,903 in CRH PLC ADR on November 28, 2024 and sell it today you would earn a total of 330.00 from holding CRH PLC ADR or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
China National Building vs. CRH PLC ADR
Performance |
| Timeline |
| China National Building |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| CRH PLC ADR |
China National and CRH PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and CRH PLC
The main advantage of trading using opposite China National and CRH PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, CRH PLC 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 CRH PLC will offset losses from the drop in CRH PLC's long position.| China National vs. Anhui Conch Cement | China National vs. Anhui Conch Cement | China National vs. United States Lime | China National vs. CRH PLC ADR |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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