Correlation Between Bank of China and Sinochem International
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By analyzing existing cross correlation between Bank of China and Sinochem International Corp, you can compare the effects of market volatilities on Bank of China and Sinochem International 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 Sinochem International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Sinochem International.
Diversification Opportunities for Bank of China and Sinochem International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Sinochem is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Sinochem International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinochem International 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 Sinochem International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinochem International has no effect on the direction of Bank of China i.e., Bank of China and Sinochem International go up and down completely randomly.
Pair Corralation between Bank of China and Sinochem International
Assuming the 90 days trading horizon Bank of China is expected to generate 0.53 times more return on investment than Sinochem International. However, Bank of China is 1.88 times less risky than Sinochem International. It trades about 0.19 of its potential returns per unit of risk. Sinochem International Corp is currently generating about 0.08 per unit of risk. If you would invest 489.00 in Bank of China on September 5, 2024 and sell it today you would earn a total of 20.00 from holding Bank of China or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Sinochem International Corp
Performance |
| Timeline |
| Bank of China |
| Sinochem International |
Bank of China and Sinochem International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Sinochem International
The main advantage of trading using opposite Bank of China and Sinochem International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Sinochem International 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 Sinochem International will offset losses from the drop in Sinochem International's long position.| Bank of China vs. Jafron Biomedical Co | Bank of China vs. Dezhan HealthCare Co | Bank of China vs. Ningbo Ligong Online | Bank of China vs. Guangzhou Boji Medical |
| Sinochem International vs. Agricultural Bank of | Sinochem International vs. Industrial and Commercial | Sinochem International vs. Bank of China | Sinochem International vs. China Construction Bank |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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