Correlation Between Bank of China and Changjiang Jinggong
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By analyzing existing cross correlation between Bank of China and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Bank of China and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Changjiang Jinggong.
Diversification Opportunities for Bank of China and Changjiang Jinggong
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Changjiang is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Bank of China i.e., Bank of China and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Bank of China and Changjiang Jinggong
Assuming the 90 days trading horizon Bank of China is expected to generate 0.9 times more return on investment than Changjiang Jinggong. However, Bank of China is 1.11 times less risky than Changjiang Jinggong. It trades about 0.09 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about -0.04 per unit of risk. If you would invest 304.00 in Bank of China on October 14, 2024 and sell it today you would earn a total of 241.00 from holding Bank of China or generate 79.28% 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. Changjiang Jinggong Steel
Performance |
| Timeline |
| Bank of China |
| Changjiang Jinggong Steel |
Bank of China and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Changjiang Jinggong
The main advantage of trading using opposite Bank of China and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Bank of China vs. Shaanxi Construction Machinery | Bank of China vs. Beijing Kingsoft Office | Bank of China vs. Allied Machinery Co | Bank of China vs. Lutian Machinery Co |
| Changjiang Jinggong vs. Agricultural Bank of | Changjiang Jinggong vs. Industrial and Commercial | Changjiang Jinggong vs. Bank of China | Changjiang Jinggong vs. PetroChina Co Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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