Correlation Between China Securities and Bank of Nanjing
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By analyzing existing cross correlation between China Securities 800 and Bank of Nanjing, you can compare the effects of market volatilities on China Securities and Bank of Nanjing 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 China Securities with a short position of Bank of Nanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Bank of Nanjing.
Diversification Opportunities for China Securities and Bank of Nanjing
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Bank is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Bank of Nanjing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Nanjing and China Securities 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 China Securities 800 are associated (or correlated) with Bank of Nanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Nanjing has no effect on the direction of China Securities i.e., China Securities and Bank of Nanjing go up and down completely randomly.
Pair Corralation between China Securities and Bank of Nanjing
Assuming the 90 days trading horizon China Securities 800 is expected to generate 1.23 times more return on investment than Bank of Nanjing. However, China Securities is 1.23 times more volatile than Bank of Nanjing. It trades about 0.13 of its potential returns per unit of risk. Bank of Nanjing is currently generating about 0.01 per unit of risk. If you would invest 361,256 in China Securities 800 on September 25, 2024 and sell it today you would earn a total of 63,015 from holding China Securities 800 or generate 17.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Securities 800 vs. Bank of Nanjing
Performance |
Timeline |
China Securities and Bank of Nanjing Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
Bank of Nanjing
Pair trading matchups for Bank of Nanjing
Pair Trading with China Securities and Bank of Nanjing
The main advantage of trading using opposite China Securities and Bank of Nanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Bank of Nanjing 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 of Nanjing will offset losses from the drop in Bank of Nanjing's long position.China Securities vs. Liuzhou Chemical Industry | China Securities vs. Guangzhou Jointas Chemical | China Securities vs. Shenzhen Noposion Agrochemicals | China Securities vs. Liaoning Dingjide Petrochemical |
Bank of Nanjing vs. Beijing Yanjing Brewery | Bank of Nanjing vs. Thinkingdom Media Group | Bank of Nanjing vs. Jilin Jlu Communication | Bank of Nanjing vs. Fiberhome Telecommunication Technologies |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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