Correlation Between Fujian Newland and Bank of Communications
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By analyzing existing cross correlation between Fujian Newland Computer and Bank of Communications, you can compare the effects of market volatilities on Fujian Newland and Bank of Communications 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 Fujian Newland with a short position of Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Bank of Communications.
Diversification Opportunities for Fujian Newland and Bank of Communications
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fujian and Bank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Bank of Communications. 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 Communications has no effect on the direction of Fujian Newland i.e., Fujian Newland and Bank of Communications go up and down completely randomly.
Pair Corralation between Fujian Newland and Bank of Communications
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 1.97 times more return on investment than Bank of Communications. However, Fujian Newland is 1.97 times more volatile than Bank of Communications. It trades about 0.04 of its potential returns per unit of risk. Bank of Communications is currently generating about 0.08 per unit of risk. If you would invest 1,423 in Fujian Newland Computer on October 27, 2024 and sell it today you would earn a total of 576.00 from holding Fujian Newland Computer or generate 40.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. Bank of Communications
Performance |
| Timeline |
| Fujian Newland Computer |
| Bank of Communications |
Fujian Newland and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and Bank of Communications
The main advantage of trading using opposite Fujian Newland and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Bank of Communications 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 Communications will offset losses from the drop in Bank of Communications' long position.| Fujian Newland vs. Shantui Construction Machinery | Fujian Newland vs. Senci Electric Machinery | Fujian Newland vs. Linzhou Heavy Machinery | Fujian Newland vs. Fujian Oriental Silver |
| Bank of Communications vs. COL Digital Publishing | Bank of Communications vs. Shanghai Action Education | Bank of Communications vs. Xinhua Winshare Publishing | Bank of Communications vs. Yankershop Food 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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