Correlation Between Lasertec and China Construction
Can any of the company-specific risk be diversified away by investing in both Lasertec 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 Lasertec and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lasertec and China Construction Bank, you can compare the effects of market volatilities on Lasertec 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 Lasertec with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and China Construction.
Diversification Opportunities for Lasertec and China Construction
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lasertec and China is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec 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 Lasertec 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 Lasertec 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 Lasertec i.e., Lasertec and China Construction go up and down completely randomly.
Pair Corralation between Lasertec and China Construction
Assuming the 90 days horizon Lasertec is expected to generate 1.16 times more return on investment than China Construction. However, Lasertec is 1.16 times more volatile than China Construction Bank. It trades about 0.18 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.04 per unit of risk. If you would invest 2,179 in Lasertec on August 28, 2025 and sell it today you would earn a total of 1,263 from holding Lasertec or generate 57.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lasertec vs. China Construction Bank
Performance |
| Timeline |
| Lasertec |
| China Construction Bank |
Lasertec and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lasertec and China Construction
The main advantage of trading using opposite Lasertec and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec 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.| Lasertec vs. China Construction Bank | Lasertec vs. Victura Construction Group | Lasertec vs. Australian Agricultural | Lasertec vs. Monster Beverage Corp |
| China Construction vs. JPMorgan Chase Co | 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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