Correlation Between Bank of China and Shanghai 2345
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By analyzing existing cross correlation between Bank of China and Shanghai 2345 Network, you can compare the effects of market volatilities on Bank of China and Shanghai 2345 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 Shanghai 2345. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shanghai 2345.
Diversification Opportunities for Bank of China and Shanghai 2345
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Shanghai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shanghai 2345 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai 2345 Network 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 Shanghai 2345. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai 2345 Network has no effect on the direction of Bank of China i.e., Bank of China and Shanghai 2345 go up and down completely randomly.
Pair Corralation between Bank of China and Shanghai 2345
Assuming the 90 days trading horizon Bank of China is expected to generate 1.79 times less return on investment than Shanghai 2345. But when comparing it to its historical volatility, Bank of China is 2.19 times less risky than Shanghai 2345. It trades about 0.09 of its potential returns per unit of risk. Shanghai 2345 Network is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Shanghai 2345 Network on September 23, 2024 and sell it today you would earn a total of 293.00 from holding Shanghai 2345 Network or generate 142.23% 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. Shanghai 2345 Network
Performance |
Timeline |
Bank of China |
Shanghai 2345 Network |
Bank of China and Shanghai 2345 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Shanghai 2345
The main advantage of trading using opposite Bank of China and Shanghai 2345 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shanghai 2345 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 Shanghai 2345 will offset losses from the drop in Shanghai 2345's long position.Bank of China vs. SUNSEA Telecommunications Co | Bank of China vs. Juewei Food Co | Bank of China vs. Jiajia Food Group | Bank of China vs. Allwin Telecommunication Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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