Correlation Between Bank of China and XCMG Construction
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By analyzing existing cross correlation between Bank of China and XCMG Construction Machinery, you can compare the effects of market volatilities on Bank of China and XCMG Construction 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 XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and XCMG Construction.
Diversification Opportunities for Bank of China and XCMG Construction
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and XCMG is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction 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 XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of Bank of China i.e., Bank of China and XCMG Construction go up and down completely randomly.
Pair Corralation between Bank of China and XCMG Construction
Assuming the 90 days trading horizon Bank of China is expected to generate 0.47 times more return on investment than XCMG Construction. However, Bank of China is 2.13 times less risky than XCMG Construction. It trades about 0.5 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.0 per unit of risk. If you would invest 491.00 in Bank of China on September 26, 2024 and sell it today you would earn a total of 52.00 from holding Bank of China or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. XCMG Construction Machinery
Performance |
| Timeline |
| Bank of China |
| XCMG Construction |
Bank of China and XCMG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and XCMG Construction
The main advantage of trading using opposite Bank of China and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, XCMG Construction 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.| Bank of China vs. Railway Signal Communication | Bank of China vs. Eastern Communications Co | Bank of China vs. Tongyu Communication | Bank of China vs. Shenzhen Kexin Communication |
| XCMG Construction vs. Industrial and Commercial | XCMG Construction vs. Agricultural Bank of | XCMG Construction vs. China Construction Bank | XCMG Construction vs. Bank of China |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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