Correlation Between China Infrastructure and Mc Endvrs

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

Diversification Opportunities for China Infrastructure and Mc Endvrs

-0.19

Correlation Coefficient

China Infrastructure  Mc Endvrs

Good diversification

The 3 months correlation between China and MSMY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding China Infrastructure Construct and Mc Endvrs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mc Endvrs 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 Mc Endvrs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mc Endvrs has no effect on the direction of China Infrastructure i.e., China Infrastructure and Mc Endvrs go up and down completely randomly.

Pair Corralation between China Infrastructure and Mc Endvrs

If you would invest  0.08  in Mc Endvrs on September 13, 2024 and sell it today you would lose (0.01) from holding Mc Endvrs or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

China Infrastructure Construct  vs.  Mc Endvrs

China Infrastructure

Risk-Adjusted Performance

0 of 100

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.

Mc Endvrs

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mc Endvrs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, Mc Endvrs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Infrastructure and Mc Endvrs

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

The idea behind China Infrastructure Construction and Mc Endvrs 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.