Correlation Between Bank of China and Xian International
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By analyzing existing cross correlation between Bank of China and Xian International Medical, you can compare the effects of market volatilities on Bank of China and Xian International 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 Xian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Xian International.
Diversification Opportunities for Bank of China and Xian International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Xian is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Xian International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xian International 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 Xian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xian International has no effect on the direction of Bank of China i.e., Bank of China and Xian International go up and down completely randomly.
Pair Corralation between Bank of China and Xian International
Assuming the 90 days trading horizon Bank of China is expected to generate 3.63 times less return on investment than Xian International. But when comparing it to its historical volatility, Bank of China is 2.57 times less risky than Xian International. It trades about 0.1 of its potential returns per unit of risk. Xian International Medical is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Xian International Medical on September 8, 2024 and sell it today you would earn a total of 157.00 from holding Xian International Medical or generate 33.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of China vs. Xian International Medical
Performance |
Timeline |
Bank of China |
Xian International |
Bank of China and Xian International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Xian International
The main advantage of trading using opposite Bank of China and Xian International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Xian International 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 Xian International will offset losses from the drop in Xian International's long position.Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Anhui Jianghuai Automobile | Bank of China vs. China Aluminum International | Bank of China vs. Hainan Haiqi Transportation |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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