Correlation Between Richter Gedeon and China Construction
Can any of the company-specific risk be diversified away by investing in both Richter Gedeon 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 Richter Gedeon and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richter Gedeon Vegyszeti and China Construction Bank, you can compare the effects of market volatilities on Richter Gedeon 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 Richter Gedeon with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richter Gedeon and China Construction.
Diversification Opportunities for Richter Gedeon and China Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Richter and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Richter Gedeon Vegyszeti 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 Richter Gedeon 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 Richter Gedeon Vegyszeti 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 Richter Gedeon i.e., Richter Gedeon and China Construction go up and down completely randomly.
Pair Corralation between Richter Gedeon and China Construction
If you would invest 61.00 in China Construction Bank on January 27, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Richter Gedeon Vegyszeti vs. China Construction Bank
Performance |
| Timeline |
| Richter Gedeon Vegyszeti |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Construction Bank |
Richter Gedeon and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richter Gedeon and China Construction
The main advantage of trading using opposite Richter Gedeon and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richter Gedeon 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.| Richter Gedeon vs. Aegon NV ADR | Richter Gedeon vs. Sun Life Financial | Richter Gedeon vs. Biglari Holdings | Richter Gedeon vs. Summit Hotel Properties |
| China Construction vs. Banco Bilbao Vizcaya | China Construction vs. ABN AMRO Bank | China Construction vs. ING Groep NV | China Construction vs. Banco de Sabadell |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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