Correlation Between Bank of China and Bank of Changsha
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By analyzing existing cross correlation between Bank of China and Bank of Changsha, you can compare the effects of market volatilities on Bank of China and Bank of Changsha 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 Bank of Changsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Bank of Changsha.
Diversification Opportunities for Bank of China and Bank of Changsha
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bank is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Bank of Changsha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Changsha 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 Bank of Changsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Changsha has no effect on the direction of Bank of China i.e., Bank of China and Bank of Changsha go up and down completely randomly.
Pair Corralation between Bank of China and Bank of Changsha
Assuming the 90 days trading horizon Bank of China is expected to generate 0.74 times more return on investment than Bank of Changsha. However, Bank of China is 1.35 times less risky than Bank of Changsha. It trades about 0.35 of its potential returns per unit of risk. Bank of Changsha is currently generating about 0.14 per unit of risk. If you would invest 482.00 in Bank of China on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Bank of China or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Bank of Changsha
Performance |
| Timeline |
| Bank of China |
| Bank of Changsha |
Bank of China and Bank of Changsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Bank of Changsha
The main advantage of trading using opposite Bank of China and Bank of Changsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Bank of Changsha 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 Bank of Changsha will offset losses from the drop in Bank of Changsha's long position.| Bank of China vs. Industrial Bank Co | Bank of China vs. GRG Banking Equipment | Bank of China vs. Central Plains Environment | Bank of China vs. Guosheng Financial Holding |
| Bank of Changsha vs. Northking Information Technology | Bank of Changsha vs. AVCON Information Tech | Bank of Changsha vs. Invengo Information Technology | Bank of Changsha vs. Peoples Insurance of |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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