Correlation Between China Construction and EFG International
Can any of the company-specific risk be diversified away by investing in both China Construction and EFG International 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 EFG International 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 EFG International AG, you can compare the effects of market volatilities on China Construction and EFG International 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 EFG International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and EFG International.
Diversification Opportunities for China Construction and EFG International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and EFG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and EFG International AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFG International 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 EFG International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFG International has no effect on the direction of China Construction i.e., China Construction and EFG International go up and down completely randomly.
Pair Corralation between China Construction and EFG International
If you would invest 65.00 in China Construction Bank on September 23, 2024 and sell it today you would earn a total of 14.00 from holding China Construction Bank or generate 21.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. EFG International AG
Performance |
| Timeline |
| China Construction Bank |
| EFG International |
China Construction and EFG International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and EFG International
The main advantage of trading using opposite China Construction and EFG International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, EFG International 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 EFG International will offset losses from the drop in EFG International's long position.| China Construction vs. National Australia Bank | China Construction vs. Svenska Handelsbanken AB | China Construction vs. Bank of America | China Construction vs. Bank of America |
| EFG International vs. China Construction Bank | EFG International vs. National Australia Bank | EFG International vs. Svenska Handelsbanken AB | EFG International vs. Bank of America |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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