Correlation Between CHINA CONBANK and Marks
Can any of the company-specific risk be diversified away by investing in both CHINA CONBANK and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on CHINA CONBANK and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA CONBANK and Marks.
Diversification Opportunities for CHINA CONBANK and Marks
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHINA and Marks is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CHINA BANK ADR20 and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of CHINA CONBANK i.e., CHINA CONBANK and Marks go up and down completely randomly.
Pair Corralation between CHINA CONBANK and Marks
Assuming the 90 days trading horizon CHINA BANK ADR20 is expected to generate 1.09 times more return on investment than Marks. However, CHINA CONBANK is 1.09 times more volatile than Marks and Spencer. It trades about 0.12 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.03 per unit of risk. If you would invest 1,320 in CHINA BANK ADR20 on September 24, 2024 and sell it today you would earn a total of 180.00 from holding CHINA BANK ADR20 or generate 13.64% 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. Marks and Spencer
Performance |
Timeline |
CHINA BANK ADR20 |
Marks and Spencer |
CHINA CONBANK and Marks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA CONBANK and Marks
The main advantage of trading using opposite CHINA CONBANK and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA CONBANK position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' 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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |