Correlation Between CIMC Vehicles and Bank of China
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By analyzing existing cross correlation between CIMC Vehicles Co and Bank of China, you can compare the effects of market volatilities on CIMC Vehicles 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 CIMC Vehicles with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMC Vehicles and Bank of China.
Diversification Opportunities for CIMC Vehicles and Bank of China
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIMC and Bank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CIMC Vehicles Co 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 CIMC Vehicles 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 CIMC Vehicles Co 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 CIMC Vehicles i.e., CIMC Vehicles and Bank of China go up and down completely randomly.
Pair Corralation between CIMC Vehicles and Bank of China
Assuming the 90 days trading horizon CIMC Vehicles Co is expected to under-perform the Bank of China. In addition to that, CIMC Vehicles is 1.7 times more volatile than Bank of China. It trades about -0.19 of its total potential returns per unit of risk. Bank of China is currently generating about 0.38 per unit of volatility. If you would invest 481.00 in Bank of China on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Bank of China or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIMC Vehicles Co vs. Bank of China
Performance |
| Timeline |
| CIMC Vehicles |
| Bank of China |
CIMC Vehicles and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMC Vehicles and Bank of China
The main advantage of trading using opposite CIMC Vehicles and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMC Vehicles 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.| CIMC Vehicles vs. Agricultural Bank of | CIMC Vehicles vs. Industrial and Commercial | CIMC Vehicles vs. Bank of China | CIMC Vehicles vs. PetroChina Co Ltd |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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