Correlation Between Bank of China and China Great
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By analyzing existing cross correlation between Bank of China and China Great Wall, you can compare the effects of market volatilities on Bank of China and China Great 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 Great. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China Great.
Diversification Opportunities for Bank of China and China Great
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and China is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China Great Wall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Great Wall 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 Great. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Great Wall has no effect on the direction of Bank of China i.e., Bank of China and China Great go up and down completely randomly.
Pair Corralation between Bank of China and China Great
Assuming the 90 days trading horizon Bank of China is expected to generate 0.77 times more return on investment than China Great. However, Bank of China is 1.3 times less risky than China Great. It trades about 0.09 of its potential returns per unit of risk. China Great Wall 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. China Great Wall
Performance |
| Timeline |
| Bank of China |
| China Great Wall |
Bank of China and China Great Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China Great
The main advantage of trading using opposite Bank of China and China Great positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China Great 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 Great will offset losses from the drop in China Great'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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