Correlation Between Bank of China and Hongrun Construction
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By analyzing existing cross correlation between Bank of China and Hongrun Construction Group, you can compare the effects of market volatilities on Bank of China and Hongrun 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 Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Hongrun Construction.
Diversification Opportunities for Bank of China and Hongrun Construction
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Hongrun is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun 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 Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Bank of China i.e., Bank of China and Hongrun Construction go up and down completely randomly.
Pair Corralation between Bank of China and Hongrun Construction
Assuming the 90 days trading horizon Bank of China is expected to generate 0.65 times more return on investment than Hongrun Construction. However, Bank of China is 1.55 times less risky than Hongrun Construction. It trades about 0.09 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.01 per unit of risk. If you would invest 304.00 in Bank of China on October 16, 2024 and sell it today you would earn a total of 231.00 from holding Bank of China or generate 75.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Hongrun Construction Group
Performance |
| Timeline |
| Bank of China |
| Hongrun Construction |
Bank of China and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Hongrun Construction
The main advantage of trading using opposite Bank of China and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Hongrun 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| Bank of China vs. CGN Nuclear Technology | Bank of China vs. Sinofibers Technology Co | Bank of China vs. Easyhome New Retail | Bank of China vs. Linewell Software Co |
| Hongrun Construction vs. Agricultural Bank of | Hongrun Construction vs. Industrial and Commercial | Hongrun Construction vs. Bank of China | Hongrun Construction vs. PetroChina Co Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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