Correlation Between Central Plains and Bank of China
Specify exactly 2 symbols:
By analyzing existing cross correlation between Central Plains Environment and Bank of China, you can compare the effects of market volatilities on Central Plains and Bank of 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 Central Plains with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and Bank of China.
Diversification Opportunities for Central Plains and Bank of China
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Bank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China and Central Plains 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 Central Plains Environment are associated (or correlated) with Bank of China. 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 China has no effect on the direction of Central Plains i.e., Central Plains and Bank of China go up and down completely randomly.
Pair Corralation between Central Plains and Bank of China
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 1.61 times more return on investment than Bank of China. However, Central Plains is 1.61 times more volatile than Bank of China. It trades about 0.06 of its potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of risk. If you would invest 707.00 in Central Plains Environment on September 14, 2024 and sell it today you would earn a total of 198.00 from holding Central Plains Environment or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plains Environment vs. Bank of China
Performance |
| Timeline |
| Central Plains Envir |
| Bank of China |
Central Plains and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plains and Bank of China
The main advantage of trading using opposite Central Plains and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains position performs unexpectedly, Bank of 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 Bank of China will offset losses from the drop in Bank of China's long position.| Central Plains vs. Lutian Machinery Co | Central Plains vs. China Longyuan Power | Central Plains vs. PetroChina Co Ltd | Central Plains vs. Bank of China |
| Bank of China vs. Industrial Bank Co | Bank of China vs. GRG Banking Equipment | Bank of China vs. Central Plains Environment | Bank of China vs. Guosheng Financial Holding |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |