Correlation Between CHINA CONBANK and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both CHINA CONBANK and Amadeus IT 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 CHINA CONBANK and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA BANK ADR20 and Amadeus IT Group, you can compare the effects of market volatilities on CHINA CONBANK and Amadeus IT 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 CONBANK with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA CONBANK and Amadeus IT.
Diversification Opportunities for CHINA CONBANK and Amadeus IT
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHINA and Amadeus is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CHINA BANK ADR20 and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and CHINA CONBANK 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 BANK ADR20 are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of CHINA CONBANK i.e., CHINA CONBANK and Amadeus IT go up and down completely randomly.
Pair Corralation between CHINA CONBANK and Amadeus IT
Assuming the 90 days trading horizon CHINA BANK ADR20 is expected to generate 1.78 times more return on investment than Amadeus IT. However, CHINA CONBANK is 1.78 times more volatile than Amadeus IT Group. It trades about 0.16 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.03 per unit of risk. If you would invest 1,250 in CHINA BANK ADR20 on September 23, 2024 and sell it today you would earn a total of 250.00 from holding CHINA BANK ADR20 or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CHINA BANK ADR20 vs. Amadeus IT Group
Performance |
Timeline |
CHINA BANK ADR20 |
Amadeus IT Group |
CHINA CONBANK and Amadeus IT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA CONBANK and Amadeus IT
The main advantage of trading using opposite CHINA CONBANK and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA CONBANK position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.CHINA CONBANK vs. INDCOMMBK CHINA ADR20 | CHINA CONBANK vs. Industrial and Commercial | CHINA CONBANK vs. AGRICULTBK HADR25 YC | CHINA CONBANK vs. BANK OCHINA H |
Amadeus IT vs. Accenture plc | Amadeus IT vs. International Business Machines | Amadeus IT vs. Infosys Limited | Amadeus IT vs. Cognizant Technology Solutions |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |