Correlation Between Amplifon SpA and China Construction
Can any of the company-specific risk be diversified away by investing in both Amplifon SpA 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 Amplifon SpA and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplifon SpA and China Construction Bank, you can compare the effects of market volatilities on Amplifon SpA 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 Amplifon SpA with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplifon SpA and China Construction.
Diversification Opportunities for Amplifon SpA and China Construction
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amplifon and China is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amplifon SpA 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 Amplifon SpA 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 Amplifon SpA 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 Amplifon SpA i.e., Amplifon SpA and China Construction go up and down completely randomly.
Pair Corralation between Amplifon SpA and China Construction
If you would invest 64.00 in China Construction Bank on January 20, 2024 and sell it today you would earn a total of 0.00 from holding China Construction Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Amplifon SpA vs. China Construction Bank
Performance |
| Timeline |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Construction Bank |
Amplifon SpA and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplifon SpA and China Construction
The main advantage of trading using opposite Amplifon SpA and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplifon SpA 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.| Amplifon SpA vs. Mediag3 | Amplifon SpA vs. Dana Inc | Amplifon SpA vs. Aptiv PLC | Amplifon SpA vs. Emerson Radio |
| China Construction vs. ANZ Group Holdings | China Construction vs. Bank of America | China Construction vs. Bank of America | China Construction vs. Wells Fargo |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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