Correlation Between ANZ Group and Bank of China
Can any of the company-specific risk be diversified away by investing in both ANZ Group and Bank of China at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ANZ Group and Bank of China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANZ Group Holdings and Bank of China, you can compare the effects of market volatilities on ANZ Group and Bank of China 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 ANZ Group with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Bank of China.
Diversification Opportunities for ANZ Group and Bank of China
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANZ and Bank is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with Bank of China. 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 China has no effect on the direction of ANZ Group i.e., ANZ Group and Bank of China go up and down completely randomly.
Pair Corralation between ANZ Group and Bank of China
If you would invest 49.00 in Bank of China on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Bank of China or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
ANZ Group Holdings vs. Bank of China
Performance |
| Timeline |
| ANZ Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank of China |
ANZ Group and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANZ Group and Bank of China
The main advantage of trading using opposite ANZ Group and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group position performs unexpectedly, Bank of China 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 China will offset losses from the drop in Bank of China's long position.| ANZ Group vs. Braemar Hotels Resorts | ANZ Group vs. Copa Holdings SA | ANZ Group vs. SkyWest | ANZ Group vs. Dine Brands Global |
| Bank of China vs. China Construction Bank | Bank of China vs. Industrial and Commercial | Bank of China vs. Agricultural Bank | Bank of China vs. Bank of China |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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