Correlation Between Agricultural Bank and Bank of China Limited
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By analyzing existing cross correlation between Agricultural Bank of and Bank of China, you can compare the effects of market volatilities on Agricultural Bank and Bank of China Limited 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 Agricultural Bank with a short position of Bank of China Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Bank of China Limited.
Diversification Opportunities for Agricultural Bank and Bank of China Limited
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Bank is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China Limited and Agricultural Bank 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 Agricultural Bank of are associated (or correlated) with Bank of China Limited. 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 Limited has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Bank of China Limited go up and down completely randomly.
Pair Corralation between Agricultural Bank and Bank of China Limited
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 2.34 times less return on investment than Bank of China Limited. But when comparing it to its historical volatility, Agricultural Bank of is 1.07 times less risky than Bank of China Limited. It trades about 0.08 of its potential returns per unit of risk. Bank of China is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 542.00 in Bank of China on January 1, 2025 and sell it today you would earn a total of 18.00 from holding Bank of China or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Bank of China
Performance |
| Timeline |
| Agricultural Bank |
| Bank of China Limited |
Agricultural Bank and Bank of China Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Bank of China Limited
The main advantage of trading using opposite Agricultural Bank and Bank of China Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Bank of China Limited 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 Limited will offset losses from the drop in Bank of China Limited's long position.| Agricultural Bank vs. Shandong Polymer Biochemicals | Agricultural Bank vs. Porton Fine Chemicals | Agricultural Bank vs. Pylon Technologies Co | Agricultural Bank vs. Shanghai Lujiazui Finance |
| Bank of China Limited vs. Nanjing Vishee Medical | Bank of China Limited vs. Tinavi Medical Technologies | Bank of China Limited vs. Maider Medical Industry | Bank of China Limited vs. Shenzhen Glory Medical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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