Correlation Between BANK OF CHINA and INTER CARS
Can any of the company-specific risk be diversified away by investing in both BANK OF CHINA and INTER CARS 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 BANK OF CHINA and INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK OF CHINA and INTER CARS SA, you can compare the effects of market volatilities on BANK OF CHINA and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and INTER CARS.
Diversification Opportunities for BANK OF CHINA and INTER CARS
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and INTER is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of BANK OF CHINA i.e., BANK OF CHINA and INTER CARS go up and down completely randomly.
Pair Corralation between BANK OF CHINA and INTER CARS
Assuming the 90 days trading horizon BANK OF CHINA is expected to generate 3.92 times more return on investment than INTER CARS. However, BANK OF CHINA is 3.92 times more volatile than INTER CARS SA. It trades about 0.24 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.31 per unit of risk. If you would invest 36.00 in BANK OF CHINA on November 7, 2024 and sell it today you would earn a total of 14.00 from holding BANK OF CHINA or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
BANK OF CHINA vs. INTER CARS SA
Performance |
| Timeline |
| BANK OF CHINA |
| INTER CARS SA |
BANK OF CHINA and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF CHINA and INTER CARS
The main advantage of trading using opposite BANK OF CHINA and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| BANK OF CHINA vs. SIVERS SEMICONDUCTORS AB | BANK OF CHINA vs. NorAm Drilling AS | BANK OF CHINA vs. Volkswagen AG | BANK OF CHINA vs. Darden Restaurants |
| INTER CARS vs. Allegheny Technologies Incorporated | INTER CARS vs. HEALTHSTREAM | INTER CARS vs. WESANA HEALTH HOLD | INTER CARS vs. NIGHTINGALE HEALTH EO |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |