Correlation Between China Telecom and Bank of China
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By analyzing existing cross correlation between China Telecom Corp and Bank of China, you can compare the effects of market volatilities on China Telecom 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 Telecom with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and Bank of China.
Diversification Opportunities for China Telecom and Bank of China
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Bank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp 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 Telecom 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 Telecom Corp 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 Telecom i.e., China Telecom and Bank of China go up and down completely randomly.
Pair Corralation between China Telecom and Bank of China
Assuming the 90 days trading horizon China Telecom Corp is expected to under-perform the Bank of China. In addition to that, China Telecom is 2.03 times more volatile than Bank of China. It trades about -0.02 of its total potential returns per unit of risk. Bank of China is currently generating about -0.03 per unit of volatility. If you would invest 495.00 in Bank of China on August 25, 2024 and sell it today you would lose (4.00) from holding Bank of China or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Telecom Corp vs. Bank of China
Performance |
| Timeline |
| China Telecom Corp |
| Bank of China |
China Telecom and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and Bank of China
The main advantage of trading using opposite China Telecom and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom 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 Telecom vs. Kunwu Jiuding Investment | China Telecom vs. Fiberhome Telecommunication Technologies | China Telecom vs. Jointo Energy Investment | China Telecom vs. Peoples Insurance of |
| Bank of China vs. Sinofibers Technology Co | Bank of China vs. Beijing Kaiwen Education | Bank of China vs. HanS Laser Tech | Bank of China vs. Tianshui Huatian Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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