Correlation Between Bank of China and Shaanxi Construction
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By analyzing existing cross correlation between Bank of China and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Bank of China and Shaanxi 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shaanxi Construction.
Diversification Opportunities for Bank of China and Shaanxi Construction
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Shaanxi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Bank of China i.e., Bank of China and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Bank of China and Shaanxi Construction
Assuming the 90 days trading horizon Bank of China is expected to generate 0.33 times more return on investment than Shaanxi Construction. However, Bank of China is 3.05 times less risky than Shaanxi Construction. It trades about -0.09 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.03 per unit of risk. If you would invest 543.00 in Bank of China on October 25, 2024 and sell it today you would lose (12.00) from holding Bank of China or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Bank of China |
| Shaanxi Construction |
Bank of China and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shaanxi Construction
The main advantage of trading using opposite Bank of China and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shaanxi 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Bank of China vs. Guangdong Jingyi Metal | Bank of China vs. Ziel Home Furnishing | Bank of China vs. Vohringer Home Technology | Bank of China vs. CITIC Metal Co |
| Shaanxi Construction vs. Kweichow Moutai Co | Shaanxi Construction vs. Contemporary Amperex Technology | Shaanxi Construction vs. Beijing Roborock Technology | Shaanxi Construction vs. BYD 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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