Correlation Between China Securities and Bank of China
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By analyzing existing cross correlation between China Securities 800 and Bank of China, you can compare the effects of market volatilities on China Securities and Bank of China 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 Securities with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Bank of China.
Diversification Opportunities for China Securities and Bank of China
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Bank is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China and China Securities 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 Securities 800 are associated (or correlated) with Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of China Securities i.e., China Securities and Bank of China go up and down completely randomly.
Pair Corralation between China Securities and Bank of China
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Bank of China. In addition to that, China Securities is 1.5 times more volatile than Bank of China. It trades about -0.1 of its total potential returns per unit of risk. Bank of China is currently generating about 0.04 per unit of volatility. If you would invest 488.00 in Bank of China on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Bank of China or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Securities 800 vs. Bank of China
Performance |
| Timeline |
China Securities and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Bank of China
Pair trading matchups for Bank of China
Pair Trading with China Securities and Bank of China
The main advantage of trading using opposite China Securities and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China's long position.| China Securities vs. Beijing Mainstreets Investment | China Securities vs. Dareway Software Co | China Securities vs. Shanghai Metersbonwe FashionAccessories | China Securities vs. Guangzhou Seagull Kitchen |
| Bank of China vs. Harbin Air Conditioning | Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Impulse Qingdao Health | Bank of China vs. Yunnan Jianzhijia Health Chain |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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