Correlation Between Bank of China and Qingdao Choho
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By analyzing existing cross correlation between Bank of China and Qingdao Choho Industrial, you can compare the effects of market volatilities on Bank of China and Qingdao Choho 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 Qingdao Choho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Qingdao Choho.
Diversification Opportunities for Bank of China and Qingdao Choho
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Qingdao is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Qingdao Choho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Choho Industrial 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 Qingdao Choho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Choho Industrial has no effect on the direction of Bank of China i.e., Bank of China and Qingdao Choho go up and down completely randomly.
Pair Corralation between Bank of China and Qingdao Choho
Assuming the 90 days trading horizon Bank of China is expected to generate 0.54 times more return on investment than Qingdao Choho. However, Bank of China is 1.85 times less risky than Qingdao Choho. It trades about 0.09 of its potential returns per unit of risk. Qingdao Choho Industrial is currently generating about -0.02 per unit of risk. If you would invest 296.00 in Bank of China on September 12, 2024 and sell it today you would earn a total of 225.00 from holding Bank of China or generate 76.01% 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. Qingdao Choho Industrial
Performance |
| Timeline |
| Bank of China |
| Qingdao Choho Industrial |
Bank of China and Qingdao Choho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Qingdao Choho
The main advantage of trading using opposite Bank of China and Qingdao Choho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Qingdao Choho 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 Qingdao Choho will offset losses from the drop in Qingdao Choho's long position.| Bank of China vs. Chenzhou Jingui Silver | Bank of China vs. Hangzhou Pinming Software | Bank of China vs. Shandong Mining Machinery | Bank of China vs. Tibet Huayu Mining |
| Qingdao Choho vs. Lutian Machinery Co | Qingdao Choho vs. PetroChina Co Ltd | Qingdao Choho vs. Bank of China | Qingdao Choho vs. Gansu Jiu Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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