Correlation Between China Construction and Hellenic Exchanges

Can any of the company-specific risk be diversified away by investing in both China Construction and Hellenic Exchanges 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 Hellenic Exchanges 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 Hellenic Exchanges Athens, you can compare the effects of market volatilities on China Construction and Hellenic Exchanges 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 Hellenic Exchanges. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Hellenic Exchanges.

Diversification Opportunities for China Construction and Hellenic Exchanges

0.0

Correlation Coefficient

China Construction  Hellenic Exchanges

Pay attention - limited upside

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

Pair Corralation between China Construction and Hellenic Exchanges

If you would invest  62.00  in China Construction Bank on February 2, 2024 and sell it today you would earn a total of  3.00  from holding China Construction Bank or generate 4.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

China Construction Bank  vs.  Hellenic Exchanges Athens

China Construction Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Construction Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, China Construction may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Hellenic Exchanges Athens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hellenic Exchanges Athens has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Hellenic Exchanges is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with China Construction and Hellenic Exchanges

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

The idea behind China Construction Bank and Hellenic Exchanges Athens 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.