Correlation Between Bank of China and China Telecom
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By analyzing existing cross correlation between Bank of China and China Telecom Corp, you can compare the effects of market volatilities on Bank of China and China Telecom 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 Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and China Telecom.
Diversification Opportunities for Bank of China and China Telecom
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and China is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and China Telecom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom Corp 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 Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom Corp has no effect on the direction of Bank of China i.e., Bank of China and China Telecom go up and down completely randomly.
Pair Corralation between Bank of China and China Telecom
Assuming the 90 days trading horizon Bank of China is expected to generate 0.48 times more return on investment than China Telecom. However, Bank of China is 2.06 times less risky than China Telecom. It trades about 0.0 of its potential returns per unit of risk. China Telecom Corp is currently generating about -0.01 per unit of risk. If you would invest 491.00 in Bank of China on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Bank of China or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. China Telecom Corp
Performance |
| Timeline |
| Bank of China |
| China Telecom Corp |
Bank of China and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and China Telecom
The main advantage of trading using opposite Bank of China and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, China Telecom 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 Telecom will offset losses from the drop in China Telecom's long position.| Bank of China vs. Sinofibers Technology Co | Bank of China vs. Beijing Kaiwen Education | Bank of China vs. HanS Laser Tech | Bank of China vs. Tianshui Huatian Technology |
| China Telecom vs. Kunwu Jiuding Investment | China Telecom vs. Fiberhome Telecommunication Technologies | China Telecom vs. Jointo Energy Investment | China Telecom 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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