Correlation Between China Construction and AEON MALL
Can any of the company-specific risk be diversified away by investing in both China Construction and AEON MALL 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 AEON MALL 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 AEON MALL LTD, you can compare the effects of market volatilities on China Construction and AEON MALL 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 AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and AEON MALL.
Diversification Opportunities for China Construction and AEON MALL
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and AEON is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL LTD 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 AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of China Construction i.e., China Construction and AEON MALL go up and down completely randomly.
Pair Corralation between China Construction and AEON MALL
Assuming the 90 days horizon China Construction Bank is expected to generate 1.71 times more return on investment than AEON MALL. However, China Construction is 1.71 times more volatile than AEON MALL LTD. It trades about 0.15 of its potential returns per unit of risk. AEON MALL LTD is currently generating about 0.11 per unit of risk. If you would invest 57.00 in China Construction Bank on December 28, 2024 and sell it today you would earn a total of 25.00 from holding China Construction Bank or generate 43.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Construction Bank vs. AEON MALL LTD
Performance |
Timeline |
China Construction Bank |
AEON MALL LTD |
China Construction and AEON MALL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Construction and AEON MALL
The main advantage of trading using opposite China Construction and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, AEON MALL 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 AEON MALL will offset losses from the drop in AEON MALL's long position.China Construction vs. Westinghouse Air Brake | China Construction vs. Air New Zealand | China Construction vs. CHINA SOUTHN AIR H | China Construction vs. LAir Liquide SA |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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