Correlation Between Bank of China and Bank of Qingdao
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By analyzing existing cross correlation between Bank of China and Bank of Qingdao, you can compare the effects of market volatilities on Bank of China and Bank of Qingdao 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 Bank of Qingdao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Bank of Qingdao.
Diversification Opportunities for Bank of China and Bank of Qingdao
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Bank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Bank of Qingdao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Qingdao 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 Bank of Qingdao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Qingdao has no effect on the direction of Bank of China i.e., Bank of China and Bank of Qingdao go up and down completely randomly.
Pair Corralation between Bank of China and Bank of Qingdao
Assuming the 90 days trading horizon Bank of China is expected to generate 1.03 times less return on investment than Bank of Qingdao. But when comparing it to its historical volatility, Bank of China is 1.21 times less risky than Bank of Qingdao. It trades about 0.07 of its potential returns per unit of risk. Bank of Qingdao is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Bank of Qingdao on September 3, 2024 and sell it today you would earn a total of 41.00 from holding Bank of Qingdao or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Bank of Qingdao
Performance |
| Timeline |
| Bank of China |
| Bank of Qingdao |
Bank of China and Bank of Qingdao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Bank of Qingdao
The main advantage of trading using opposite Bank of China and Bank of Qingdao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Bank of Qingdao 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 Bank of Qingdao will offset losses from the drop in Bank of Qingdao's long position.| Bank of China vs. Tongyu Communication | Bank of China vs. Guangzhou Haige Communications | Bank of China vs. Everdisplay Optronics Shanghai | Bank of China vs. Wuhan Yangtze Communication |
| Bank of Qingdao vs. AVCON Information Tech | Bank of Qingdao vs. Guangzhou Ruoyuchen Information | Bank of Qingdao vs. Focus Media Information | Bank of Qingdao vs. Lonkey Industrial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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