Correlation Between Bank of China and China Vanke
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By analyzing existing cross correlation between Bank of China and China Vanke Co, you can compare the effects of market volatilities on Bank of China and China Vanke 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 Bank of China with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China Vanke.
Diversification Opportunities for Bank of China and China Vanke
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and China is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and Bank of China 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 Bank of China are associated (or correlated) with China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of Bank of China i.e., Bank of China and China Vanke go up and down completely randomly.
Pair Corralation between Bank of China and China Vanke
Assuming the 90 days trading horizon Bank of China is expected to generate 0.47 times more return on investment than China Vanke. However, Bank of China is 2.13 times less risky than China Vanke. It trades about 0.09 of its potential returns per unit of risk. China Vanke Co is currently generating about -0.04 per unit of risk. If you would invest 398.00 in Bank of China on January 22, 2025 and sell it today you would earn a total of 165.00 from holding Bank of China or generate 41.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. China Vanke Co
Performance |
| Timeline |
| Bank of China |
| China Vanke |
Bank of China and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China Vanke
The main advantage of trading using opposite Bank of China and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China Vanke 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 China Vanke will offset losses from the drop in China Vanke's long position.| Bank of China vs. Mengtian Home Group | Bank of China vs. Western Metal Materials | Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Guangdong Jingyi Metal |
| China Vanke vs. Aba Chemicals Corp | China Vanke vs. Fujian Longzhou Transportation | China Vanke vs. Hubei Yihua Chemical | China Vanke vs. Ningxia Younglight Chemicals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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