Correlation Between INDCOMMBK CHINA and CHINA CONBANK
Can any of the company-specific risk be diversified away by investing in both INDCOMMBK CHINA and CHINA CONBANK 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 INDCOMMBK CHINA and CHINA CONBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDCOMMBK CHINA ADR20 and CHINA BANK ADR20, you can compare the effects of market volatilities on INDCOMMBK CHINA and CHINA CONBANK 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 INDCOMMBK CHINA with a short position of CHINA CONBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDCOMMBK CHINA and CHINA CONBANK.
Diversification Opportunities for INDCOMMBK CHINA and CHINA CONBANK
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INDCOMMBK and CHINA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding INDCOMMBK CHINA ADR20 and CHINA BANK ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA BANK ADR20 and INDCOMMBK 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 INDCOMMBK CHINA ADR20 are associated (or correlated) with CHINA CONBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA BANK ADR20 has no effect on the direction of INDCOMMBK CHINA i.e., INDCOMMBK CHINA and CHINA CONBANK go up and down completely randomly.
Pair Corralation between INDCOMMBK CHINA and CHINA CONBANK
Assuming the 90 days trading horizon INDCOMMBK CHINA ADR20 is expected to generate 1.29 times more return on investment than CHINA CONBANK. However, INDCOMMBK CHINA is 1.29 times more volatile than CHINA BANK ADR20. It trades about 0.05 of its potential returns per unit of risk. CHINA BANK ADR20 is currently generating about 0.06 per unit of risk. If you would invest 765.00 in INDCOMMBK CHINA ADR20 on September 23, 2024 and sell it today you would earn a total of 415.00 from holding INDCOMMBK CHINA ADR20 or generate 54.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDCOMMBK CHINA ADR20 vs. CHINA BANK ADR20
Performance |
| Timeline |
| INDCOMMBK CHINA ADR20 |
| CHINA BANK ADR20 |
INDCOMMBK CHINA and CHINA CONBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDCOMMBK CHINA and CHINA CONBANK
The main advantage of trading using opposite INDCOMMBK CHINA and CHINA CONBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDCOMMBK CHINA position performs unexpectedly, CHINA CONBANK 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 CONBANK will offset losses from the drop in CHINA CONBANK's long position.| INDCOMMBK CHINA vs. Industrial and Commercial | INDCOMMBK CHINA vs. CHINA BANK ADR20 | INDCOMMBK CHINA vs. AGRICULTBK HADR25 YC | INDCOMMBK CHINA vs. BANK OCHINA H |
| CHINA CONBANK vs. INDCOMMBK CHINA ADR20 | CHINA CONBANK vs. Industrial and Commercial | CHINA CONBANK vs. AGRICULTBK HADR25 YC | CHINA CONBANK vs. BANK OCHINA H |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |