Correlation Between Bank of China and Changchun High
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By analyzing existing cross correlation between Bank of China and Changchun High New, you can compare the effects of market volatilities on Bank of China and Changchun High 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 Changchun High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Changchun High.
Diversification Opportunities for Bank of China and Changchun High
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Changchun is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Changchun High New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun High New 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 Changchun High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun High New has no effect on the direction of Bank of China i.e., Bank of China and Changchun High go up and down completely randomly.
Pair Corralation between Bank of China and Changchun High
Assuming the 90 days trading horizon Bank of China is expected to under-perform the Changchun High. But the stock apears to be less risky and, when comparing its historical volatility, Bank of China is 2.71 times less risky than Changchun High. The stock trades about -0.02 of its potential returns per unit of risk. The Changchun High New is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,082 in Changchun High New on August 27, 2024 and sell it today you would earn a total of 1,878 from holding Changchun High New or generate 20.68% 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. Changchun High New
Performance |
| Timeline |
| Bank of China |
| Changchun High New |
Bank of China and Changchun High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Changchun High
The main advantage of trading using opposite Bank of China and Changchun High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Changchun High 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 Changchun High will offset losses from the drop in Changchun High's long position.| Bank of China vs. Harbin Air Conditioning | Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Impulse Qingdao Health | Bank of China vs. Yunnan Jianzhijia Health Chain |
| Changchun High vs. Hengkang Medical Group | Changchun High vs. GKHT Medical Technology | Changchun High vs. Sunwave Communications Co | Changchun High vs. Ningbo Ligong Online |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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