Correlation Between Bank of China and Chongqing Road
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By analyzing existing cross correlation between Bank of China and Chongqing Road Bridge, you can compare the effects of market volatilities on Bank of China and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Chongqing Road.
Diversification Opportunities for Bank of China and Chongqing Road
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Chongqing is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Bank of China i.e., Bank of China and Chongqing Road go up and down completely randomly.
Pair Corralation between Bank of China and Chongqing Road
Assuming the 90 days trading horizon Bank of China is expected to generate 0.23 times more return on investment than Chongqing Road. However, Bank of China is 4.35 times less risky than Chongqing Road. It trades about 0.15 of its potential returns per unit of risk. Chongqing Road Bridge is currently generating about -0.01 per unit of risk. If you would invest 496.00 in Bank of China on September 23, 2024 and sell it today you would earn a total of 30.00 from holding Bank of China or generate 6.05% 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. Chongqing Road Bridge
Performance |
Timeline |
Bank of China |
Chongqing Road Bridge |
Bank of China and Chongqing Road Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Chongqing Road
The main advantage of trading using opposite Bank of China and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road'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 |
Chongqing Road vs. Agricultural Bank of | Chongqing Road vs. Industrial and Commercial | Chongqing Road vs. Bank of China | Chongqing Road vs. China Construction Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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