Correlation Between Beijing Shanghai and Bank of China
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By analyzing existing cross correlation between Beijing Shanghai High Speed and Bank of China, you can compare the effects of market volatilities on Beijing Shanghai 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 Beijing Shanghai with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shanghai and Bank of China.
Diversification Opportunities for Beijing Shanghai and Bank of China
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Bank is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shanghai High Speed 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 Beijing Shanghai 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 Beijing Shanghai High Speed 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 Beijing Shanghai i.e., Beijing Shanghai and Bank of China go up and down completely randomly.
Pair Corralation between Beijing Shanghai and Bank of China
Assuming the 90 days trading horizon Beijing Shanghai High Speed is expected to under-perform the Bank of China. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Shanghai High Speed is 1.04 times less risky than Bank of China. The stock trades about -0.3 of its potential returns per unit of risk. The Bank of China is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 523.00 in Bank of China on October 20, 2024 and sell it today you would earn a total of 22.00 from holding Bank of China or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Shanghai High Speed vs. Bank of China
Performance |
| Timeline |
| Beijing Shanghai High |
| Bank of China |
Beijing Shanghai and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Shanghai and Bank of China
The main advantage of trading using opposite Beijing Shanghai and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shanghai 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.| Beijing Shanghai vs. Shenzhen SDG Information | Beijing Shanghai vs. East Money Information | Beijing Shanghai vs. AVIC Fund Management | Beijing Shanghai vs. Jinxiandai Information Industry |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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