Correlation Between China Construction and Custom Truck

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

Diversification Opportunities for China Construction and Custom Truck

-0.39

Correlation Coefficient

China Construction  Custom Truck

Very good diversification

The 3 months correlation between China and Custom is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of China Construction i.e., China Construction and Custom Truck go up and down completely randomly.

Pair Corralation between China Construction and Custom Truck

Assuming the 90 days horizon China Construction Bank is expected to generate 1.37 times more return on investment than Custom Truck. However, China Construction is 1.37 times more volatile than Custom Truck One. It trades about 0.04 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.0 per unit of risk. If you would invest  95.00  in China Construction Bank on September 3, 2025 and sell it today you would earn a total of  4.00  from holding China Construction Bank or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

China Construction Bank  vs.  Custom Truck One

China Construction Bank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Construction Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, China Construction may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Custom Truck One

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Custom Truck may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with China Construction and Custom Truck

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

The idea behind China Construction Bank and Custom Truck One 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.