Correlation Between CHINA CONBANK and INDCOMMBK CHINA
Can any of the company-specific risk be diversified away by investing in both CHINA CONBANK and INDCOMMBK 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 CHINA CONBANK and INDCOMMBK CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA BANK ADR20 and INDCOMMBK CHINA ADR20, you can compare the effects of market volatilities on CHINA CONBANK and INDCOMMBK 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 CHINA CONBANK with a short position of INDCOMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA CONBANK and INDCOMMBK CHINA.
Diversification Opportunities for CHINA CONBANK and INDCOMMBK CHINA
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CHINA and INDCOMMBK is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CHINA BANK ADR20 and INDCOMMBK CHINA ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDCOMMBK CHINA ADR20 and CHINA CONBANK 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 CHINA BANK ADR20 are associated (or correlated) with INDCOMMBK CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDCOMMBK CHINA ADR20 has no effect on the direction of CHINA CONBANK i.e., CHINA CONBANK and INDCOMMBK CHINA go up and down completely randomly.
Pair Corralation between CHINA CONBANK and INDCOMMBK CHINA
Assuming the 90 days trading horizon CHINA BANK ADR20 is expected to generate 0.92 times more return on investment than INDCOMMBK CHINA. However, CHINA BANK ADR20 is 1.09 times less risky than INDCOMMBK CHINA. It trades about 0.15 of its potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about 0.14 per unit of risk. If you would invest 1,520 in CHINA BANK ADR20 on November 28, 2024 and sell it today you would earn a total of 50.00 from holding CHINA BANK ADR20 or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA BANK ADR20 vs. INDCOMMBK CHINA ADR20
Performance |
| Timeline |
| CHINA BANK ADR20 |
| INDCOMMBK CHINA ADR20 |
CHINA CONBANK and INDCOMMBK CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA CONBANK and INDCOMMBK CHINA
The main advantage of trading using opposite CHINA CONBANK and INDCOMMBK CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA CONBANK position performs unexpectedly, INDCOMMBK 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 INDCOMMBK CHINA will offset losses from the drop in INDCOMMBK CHINA's long position.| CHINA CONBANK vs. EMPEROR ENT HOTEL | CHINA CONBANK vs. Suntory Beverage Food | CHINA CONBANK vs. Sunstone Hotel Investors | CHINA CONBANK vs. Emperor Entertainment Hotel |
| INDCOMMBK CHINA vs. Air Transport Services | INDCOMMBK CHINA vs. ZINC MEDIA GR | INDCOMMBK CHINA vs. CNVISION MEDIA | INDCOMMBK CHINA vs. ANTA Sports Products |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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