Correlation Between CHINA CONBANK and PUBLIC STORAGE
Can any of the company-specific risk be diversified away by investing in both CHINA CONBANK and PUBLIC STORAGE 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 PUBLIC STORAGE 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 PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on CHINA CONBANK and PUBLIC STORAGE 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 PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA CONBANK and PUBLIC STORAGE.
Diversification Opportunities for CHINA CONBANK and PUBLIC STORAGE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and PUBLIC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CHINA BANK ADR20 and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO 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 PUBLIC STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUBLIC STORAGE PRFO has no effect on the direction of CHINA CONBANK i.e., CHINA CONBANK and PUBLIC STORAGE go up and down completely randomly.
Pair Corralation between CHINA CONBANK and PUBLIC STORAGE
Assuming the 90 days trading horizon CHINA BANK ADR20 is expected to generate 2.07 times more return on investment than PUBLIC STORAGE. However, CHINA CONBANK is 2.07 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.11 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about 0.03 per unit of risk. If you would invest 926.00 in CHINA BANK ADR20 on September 25, 2024 and sell it today you would earn a total of 604.00 from holding CHINA BANK ADR20 or generate 65.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CHINA BANK ADR20 vs. PUBLIC STORAGE PRFO
Performance |
Timeline |
CHINA BANK ADR20 |
PUBLIC STORAGE PRFO |
CHINA CONBANK and PUBLIC STORAGE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA CONBANK and PUBLIC STORAGE
The main advantage of trading using opposite CHINA CONBANK and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA CONBANK position performs unexpectedly, PUBLIC STORAGE 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 PUBLIC STORAGE will offset losses from the drop in PUBLIC STORAGE'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 |
PUBLIC STORAGE vs. Safestore Holdings plc | PUBLIC STORAGE vs. EHEALTH | PUBLIC STORAGE vs. Varta AG | PUBLIC STORAGE vs. TRAVEL LEISURE DL 01 |
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.
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