Correlation Between BANK OF CHINA and BANK OCHINA

Can any of the company-specific risk be diversified away by investing in both BANK OF CHINA and BANK OCHINA 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 BANK OCHINA 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 BANK OCHINA H, you can compare the effects of market volatilities on BANK OF CHINA and BANK OCHINA 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 BANK OCHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and BANK OCHINA.

Diversification Opportunities for BANK OF CHINA and BANK OCHINA

0.0

Correlation Coefficient

BANK OF CHINA  BANK OCHINA

Pay attention - limited upside

The 3 months correlation between BANK and BANK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and BANK OCHINA H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OCHINA H 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 BANK OCHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OCHINA H has no effect on the direction of BANK OF CHINA i.e., BANK OF CHINA and BANK OCHINA go up and down completely randomly.

Pair Corralation between BANK OF CHINA and BANK OCHINA

If you would invest  1,090  in BANK OCHINA H on October 7, 2024 and sell it today you would earn a total of  80.00  from holding BANK OCHINA H or generate 7.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

BANK OF CHINA  vs.  BANK OCHINA H

BANK OF CHINA

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days BANK OF CHINA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BANK OF CHINA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BANK OCHINA H

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BANK OCHINA H are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BANK OCHINA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BANK OF CHINA and BANK OCHINA

The main advantage of trading using opposite BANK OF CHINA and BANK OCHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA position performs unexpectedly, BANK OCHINA 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 BANK OCHINA will offset losses from the drop in BANK OCHINA's long position.

The idea behind BANK OF CHINA and BANK OCHINA H pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.