Correlation Between Bank of China and Shanghai Construction
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By analyzing existing cross correlation between Bank of China and Shanghai Construction Group, you can compare the effects of market volatilities on Bank of China and Shanghai Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shanghai Construction.
Diversification Opportunities for Bank of China and Shanghai Construction
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Shanghai is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Bank of China i.e., Bank of China and Shanghai Construction go up and down completely randomly.
Pair Corralation between Bank of China and Shanghai Construction
Assuming the 90 days trading horizon Bank of China is expected to generate 0.85 times more return on investment than Shanghai Construction. However, Bank of China is 1.18 times less risky than Shanghai Construction. It trades about 0.09 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about 0.0 per unit of risk. If you would invest 301.00 in Bank of China on October 28, 2024 and sell it today you would earn a total of 230.00 from holding Bank of China or generate 76.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shanghai Construction Group
Performance |
| Timeline |
| Bank of China |
| Shanghai Construction |
Bank of China and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shanghai Construction
The main advantage of trading using opposite Bank of China and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shanghai Construction 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 Construction will offset losses from the drop in Shanghai Construction's long position.| Bank of China vs. Hainan Haiqi Transportation | Bank of China vs. Zhengping RoadBridge Constr | Bank of China vs. Porton Fine Chemicals | Bank of China vs. Hubei Xingfa Chemicals |
| Shanghai Construction vs. Industrial and Commercial | Shanghai Construction vs. China Construction Bank | Shanghai Construction vs. Agricultural Bank of | Shanghai Construction vs. Bank of China |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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