Correlation Between Bank of China and China Minsheng
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By analyzing existing cross correlation between Bank of China and China Minsheng Banking, you can compare the effects of market volatilities on Bank of China and China Minsheng 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 Minsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China Minsheng.
Diversification Opportunities for Bank of China and China Minsheng
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China Minsheng Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsheng Banking 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 Minsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsheng Banking has no effect on the direction of Bank of China i.e., Bank of China and China Minsheng go up and down completely randomly.
Pair Corralation between Bank of China and China Minsheng
Assuming the 90 days trading horizon Bank of China is expected to generate 0.95 times more return on investment than China Minsheng. However, Bank of China is 1.05 times less risky than China Minsheng. It trades about 0.15 of its potential returns per unit of risk. China Minsheng Banking is currently generating about -0.01 per unit of risk. If you would invest 526.00 in Bank of China on October 21, 2024 and sell it today you would earn a total of 19.00 from holding Bank of China or generate 3.61% 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. China Minsheng Banking
Performance |
| Timeline |
| Bank of China |
| China Minsheng Banking |
Bank of China and China Minsheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China Minsheng
The main advantage of trading using opposite Bank of China and China Minsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China Minsheng 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 Minsheng will offset losses from the drop in China Minsheng's long position.| Bank of China vs. Shaanxi Construction Machinery | Bank of China vs. Digital China Information | Bank of China vs. Longmaster Information Tech | Bank of China vs. Ningbo Construction Co |
| China Minsheng vs. Bank of China | China Minsheng vs. Kweichow Moutai Co | China Minsheng vs. PetroChina Co Ltd | China Minsheng vs. Bank of Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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