Correlation Between Bank of China and Shanghai Pudong
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By analyzing existing cross correlation between Bank of China and Shanghai Pudong Development, you can compare the effects of market volatilities on Bank of China and Shanghai Pudong 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 Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shanghai Pudong.
Diversification Opportunities for Bank of China and Shanghai Pudong
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Shanghai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve 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 Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of Bank of China i.e., Bank of China and Shanghai Pudong go up and down completely randomly.
Pair Corralation between Bank of China and Shanghai Pudong
Assuming the 90 days trading horizon Bank of China is expected to generate 2.68 times less return on investment than Shanghai Pudong. But when comparing it to its historical volatility, Bank of China is 1.06 times less risky than Shanghai Pudong. It trades about 0.05 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 714.00 in Shanghai Pudong Development on August 25, 2024 and sell it today you would earn a total of 234.00 from holding Shanghai Pudong Development or generate 32.77% 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. Shanghai Pudong Development
Performance |
| Timeline |
| Bank of China |
| Shanghai Pudong Deve |
Bank of China and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shanghai Pudong
The main advantage of trading using opposite Bank of China and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shanghai Pudong 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 Shanghai Pudong will offset losses from the drop in Shanghai Pudong's long position.| Bank of China vs. Sinofibers Technology Co | Bank of China vs. Beijing Kaiwen Education | Bank of China vs. HanS Laser Tech | Bank of China vs. Tianshui Huatian Technology |
| Shanghai Pudong vs. Fujian Longzhou Transportation | Shanghai Pudong vs. Tianshui Huatian Technology | Shanghai Pudong vs. Western Superconducting Tech | Shanghai Pudong vs. Saurer Intelligent Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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