Correlation Between BANK OF CHINA and Apple
Can any of the company-specific risk be diversified away by investing in both BANK OF CHINA and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on BANK OF CHINA and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and Apple.
Diversification Opportunities for BANK OF CHINA and Apple
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and Apple is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of BANK OF CHINA i.e., BANK OF CHINA and Apple go up and down completely randomly.
Pair Corralation between BANK OF CHINA and Apple
Assuming the 90 days trading horizon BANK OF CHINA is expected to generate 1.1 times more return on investment than Apple. However, BANK OF CHINA is 1.1 times more volatile than Apple Inc. It trades about 0.28 of its potential returns per unit of risk. Apple Inc is currently generating about -0.02 per unit of risk. If you would invest 46.00 in BANK OF CHINA on October 12, 2024 and sell it today you would earn a total of 3.00 from holding BANK OF CHINA or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK OF CHINA vs. Apple Inc
Performance |
| Timeline |
| BANK OF CHINA |
| Apple Inc |
BANK OF CHINA and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF CHINA and Apple
The main advantage of trading using opposite BANK OF CHINA and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| BANK OF CHINA vs. Apple Inc | BANK OF CHINA vs. Apple Inc | BANK OF CHINA vs. Apple Inc | BANK OF CHINA vs. Apple Inc |
| Apple vs. GBS Software AG | Apple vs. RYANAIR HLDGS ADR | Apple vs. Unity Software | Apple vs. Constellation Software |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| 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 | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |