Correlation Between Bank of China and China Express
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By analyzing existing cross correlation between Bank of China and China Express Airlines, you can compare the effects of market volatilities on Bank of China and China Express 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 Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China Express.
Diversification Opportunities for Bank of China and China Express
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and China is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China Express Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Express Airlines 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 Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Express Airlines has no effect on the direction of Bank of China i.e., Bank of China and China Express go up and down completely randomly.
Pair Corralation between Bank of China and China Express
Assuming the 90 days trading horizon Bank of China is expected to generate 0.46 times more return on investment than China Express. However, Bank of China is 2.17 times less risky than China Express. It trades about 0.19 of its potential returns per unit of risk. China Express Airlines is currently generating about -0.09 per unit of risk. If you would invest 489.00 in Bank of China on September 5, 2024 and sell it today you would earn a total of 20.00 from holding Bank of China or generate 4.09% 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. China Express Airlines
Performance |
| Timeline |
| Bank of China |
| China Express Airlines |
Bank of China and China Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China Express
The main advantage of trading using opposite Bank of China and China Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China Express 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 Express will offset losses from the drop in China Express' long position.| Bank of China vs. Jafron Biomedical Co | Bank of China vs. Dezhan HealthCare Co | Bank of China vs. Ningbo Ligong Online | Bank of China vs. Guangzhou Boji Medical |
| China Express vs. Agricultural Bank of | China Express vs. Industrial and Commercial | China Express vs. Bank of China | China Express vs. China Construction Bank |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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