Correlation Between Bank of China and ChengDu Hi
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By analyzing existing cross correlation between Bank of China and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Bank of China and ChengDu Hi 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 ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and ChengDu Hi.
Diversification Opportunities for Bank of China and ChengDu Hi
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and ChengDu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech 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 ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Bank of China i.e., Bank of China and ChengDu Hi go up and down completely randomly.
Pair Corralation between Bank of China and ChengDu Hi
Assuming the 90 days trading horizon Bank of China is expected to generate 5.24 times less return on investment than ChengDu Hi. But when comparing it to its historical volatility, Bank of China is 3.93 times less risky than ChengDu Hi. It trades about 0.09 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,528 in ChengDu Hi Tech Development on August 29, 2024 and sell it today you would earn a total of 4,251 from holding ChengDu Hi Tech Development or generate 278.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Bank of China |
| ChengDu Hi Tech |
Bank of China and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and ChengDu Hi
The main advantage of trading using opposite Bank of China and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Bank of China vs. Dhc Software Co | Bank of China vs. Jinyu Bio Technology Co | Bank of China vs. BTG Hotels Group | Bank of China vs. Linewell Software Co |
| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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