Correlation Between China Infrastructure and BC Bud

Can any of the company-specific risk be diversified away by investing in both China Infrastructure and BC Bud 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 Infrastructure and BC Bud into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Infrastructure Construction and The BC Bud, you can compare the effects of market volatilities on China Infrastructure and BC Bud 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 Infrastructure with a short position of BC Bud. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Infrastructure and BC Bud.

Diversification Opportunities for China Infrastructure and BC Bud

0.0

Correlation Coefficient

China Infrastructure  BC Bud

Pay attention - limited upside

The 3 months correlation between China and BCBCF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Infrastructure Construct and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud and China Infrastructure 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 Infrastructure Construction are associated (or correlated) with BC Bud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Bud has no effect on the direction of China Infrastructure i.e., China Infrastructure and BC Bud go up and down completely randomly.

Pair Corralation between China Infrastructure and BC Bud

If you would invest (100.00) in China Infrastructure Construction on December 28, 2024 and sell it today you would earn a total of  100.00  from holding China Infrastructure Construction or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

China Infrastructure Construct  vs.  The BC Bud

China Infrastructure

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Infrastructure Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China Infrastructure is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BC Bud

Risk-Adjusted Performance

Very Weak

Over the last 90 days The BC Bud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with China Infrastructure and BC Bud

The main advantage of trading using opposite China Infrastructure and BC Bud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Infrastructure position performs unexpectedly, BC Bud 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 BC Bud will offset losses from the drop in BC Bud's long position.

The idea behind China Infrastructure Construction and The BC Bud pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .