Correlation Between Bank of China and China National
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By analyzing existing cross correlation between Bank of China and China National Software, you can compare the effects of market volatilities on Bank of China and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China National.
Diversification Opportunities for Bank of China and China National
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and China is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Bank of China i.e., Bank of China and China National go up and down completely randomly.
Pair Corralation between Bank of China and China National
Assuming the 90 days trading horizon Bank of China is expected to generate 0.51 times more return on investment than China National. However, Bank of China is 1.95 times less risky than China National. It trades about -0.14 of its potential returns per unit of risk. China National Software is currently generating about -0.15 per unit of risk. If you would invest 553.00 in Bank of China on October 29, 2024 and sell it today you would lose (22.00) from holding Bank of China or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. China National Software
Performance |
| Timeline |
| Bank of China |
| China National Software |
Bank of China and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China National
The main advantage of trading using opposite Bank of China and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.| Bank of China vs. Gifore Agricultural Machinery | Bank of China vs. Shantui Construction Machinery | Bank of China vs. Qingdao Foods Co | Bank of China vs. Fujian Anjoy Foods |
| China National vs. Bank of China | China National vs. Kweichow Moutai Co | China National vs. PetroChina Co Ltd | China National 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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