Correlation Between Bohai Leasing and Digital China
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By analyzing existing cross correlation between Bohai Leasing Co and Digital China Information, you can compare the effects of market volatilities on Bohai Leasing and Digital China 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 Bohai Leasing with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohai Leasing and Digital China.
Diversification Opportunities for Bohai Leasing and Digital China
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bohai and Digital is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bohai Leasing Co and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Bohai Leasing 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 Bohai Leasing Co are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Bohai Leasing i.e., Bohai Leasing and Digital China go up and down completely randomly.
Pair Corralation between Bohai Leasing and Digital China
Assuming the 90 days trading horizon Bohai Leasing is expected to generate 3.14 times less return on investment than Digital China. But when comparing it to its historical volatility, Bohai Leasing Co is 1.45 times less risky than Digital China. It trades about 0.11 of its potential returns per unit of risk. Digital China Information is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Digital China Information on November 6, 2024 and sell it today you would earn a total of 86.00 from holding Digital China Information or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohai Leasing Co vs. Digital China Information
Performance |
| Timeline |
| Bohai Leasing |
| Digital China Information |
Bohai Leasing and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohai Leasing and Digital China
The main advantage of trading using opposite Bohai Leasing and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohai Leasing position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Bohai Leasing vs. Shengda Mining Co | Bohai Leasing vs. Linewell Software Co | Bohai Leasing vs. Iat Automobile Technology | Bohai Leasing vs. Fujian Oriental Silver |
| Digital China vs. GuoChuang Software Co | Digital China vs. Guangdong Jinma Entertainment | Digital China vs. Omnijoi Media Corp | Digital China vs. Simei Media Co |
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.
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