Correlation Between Dezhan HealthCare and Bank of China
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By analyzing existing cross correlation between Dezhan HealthCare Co and Bank of China, you can compare the effects of market volatilities on Dezhan HealthCare 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 Dezhan HealthCare with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dezhan HealthCare and Bank of China.
Diversification Opportunities for Dezhan HealthCare and Bank of China
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dezhan and Bank is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dezhan HealthCare Co 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 Dezhan HealthCare 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 Dezhan HealthCare Co 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 Dezhan HealthCare i.e., Dezhan HealthCare and Bank of China go up and down completely randomly.
Pair Corralation between Dezhan HealthCare and Bank of China
Assuming the 90 days trading horizon Dezhan HealthCare Co is expected to under-perform the Bank of China. In addition to that, Dezhan HealthCare is 1.98 times more volatile than Bank of China. It trades about 0.0 of its total potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of volatility. If you would invest 296.00 in Bank of China on September 5, 2024 and sell it today you would earn a total of 213.00 from holding Bank of China or generate 71.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dezhan HealthCare Co vs. Bank of China
Performance |
| Timeline |
| Dezhan HealthCare |
| Bank of China |
Dezhan HealthCare and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dezhan HealthCare and Bank of China
The main advantage of trading using opposite Dezhan HealthCare and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dezhan HealthCare 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.| Dezhan HealthCare vs. Industrial and Commercial | Dezhan HealthCare vs. Agricultural Bank of | Dezhan HealthCare vs. China Construction Bank | Dezhan HealthCare vs. Bank of China |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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