Correlation Between Zhejiang Yinlun and Bank of China
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Bank of China, you can compare the effects of market volatilities on Zhejiang Yinlun 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 Zhejiang Yinlun with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Bank of China.
Diversification Opportunities for Zhejiang Yinlun and Bank of China
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhejiang and Bank is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery 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 Zhejiang Yinlun 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 Zhejiang Yinlun Machinery 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 Zhejiang Yinlun i.e., Zhejiang Yinlun and Bank of China go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Bank of China
Assuming the 90 days trading horizon Zhejiang Yinlun Machinery is expected to under-perform the Bank of China. In addition to that, Zhejiang Yinlun is 1.89 times more volatile than Bank of China. It trades about -0.08 of its total potential returns per unit of risk. Bank of China is currently generating about 0.0 per unit of volatility. If you would invest 500.00 in Bank of China on August 29, 2024 and sell it today you would lose (1.00) from holding Bank of China or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Bank of China
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
| Bank of China |
Zhejiang Yinlun and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Bank of China
The main advantage of trading using opposite Zhejiang Yinlun and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun 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.| Zhejiang Yinlun vs. Agricultural Bank of | Zhejiang Yinlun vs. Industrial and Commercial | Zhejiang Yinlun vs. Bank of China | Zhejiang Yinlun vs. China Construction Bank |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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