Correlation Between Shaanxi Meineng and China Construction
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By analyzing existing cross correlation between Shaanxi Meineng Clean and China Construction Bank, you can compare the effects of market volatilities on Shaanxi Meineng 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 Shaanxi Meineng with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and China Construction.
Diversification Opportunities for Shaanxi Meineng and China Construction
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean 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 Shaanxi Meineng 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 Shaanxi Meineng Clean 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 Shaanxi Meineng i.e., Shaanxi Meineng and China Construction go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and China Construction
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to under-perform the China Construction. In addition to that, Shaanxi Meineng is 2.43 times more volatile than China Construction Bank. It trades about -0.03 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.09 per unit of volatility. If you would invest 592.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 245.00 from holding China Construction Bank or generate 41.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shaanxi Meineng Clean vs. China Construction Bank
Performance |
Timeline |
Shaanxi Meineng Clean |
China Construction Bank |
Shaanxi Meineng and China Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shaanxi Meineng and China Construction
The main advantage of trading using opposite Shaanxi Meineng and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng 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.Shaanxi Meineng vs. Gansu Jiu Steel | Shaanxi Meineng vs. Shandong Mining Machinery | Shaanxi Meineng vs. Aba Chemicals Corp | Shaanxi Meineng vs. BlueFocus Communication Group |
China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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