Correlation Between FEMALE HEALTH and China Construction
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH and China Construction 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 FEMALE HEALTH and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and China Construction Bank, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and China Construction.
Diversification Opportunities for FEMALE HEALTH and China Construction
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEMALE and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and China Construction go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and China Construction
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the China Construction. In addition to that, FEMALE HEALTH is 2.52 times more volatile than China Construction Bank. It trades about -0.04 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.03 per unit of volatility. If you would invest 56.00 in China Construction Bank on September 2, 2024 and sell it today you would earn a total of 16.00 from holding China Construction Bank or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. China Construction Bank
Performance |
| Timeline |
| FEMALE HEALTH |
| China Construction Bank |
FEMALE HEALTH and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and China Construction
The main advantage of trading using opposite FEMALE HEALTH and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. SIVERS SEMICONDUCTORS AB | FEMALE HEALTH vs. Darden Restaurants | FEMALE HEALTH vs. Reliance Steel Aluminum | FEMALE HEALTH vs. Q2M Managementberatung AG |
| China Construction vs. Playtech plc | China Construction vs. Verizon Communications | China Construction vs. PT Global Mediacom | China Construction vs. MTI WIRELESS EDGE |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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