Correlation Between Guangdong Shenglu and Bank of Communications
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Bank of Communications, you can compare the effects of market volatilities on Guangdong Shenglu 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 Guangdong Shenglu with a short position of Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Bank of Communications.
Diversification Opportunities for Guangdong Shenglu and Bank of Communications
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Bank is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic 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 Guangdong Shenglu 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 Guangdong Shenglu Telecommunication 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 Guangdong Shenglu i.e., Guangdong Shenglu and Bank of Communications go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Bank of Communications
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 2.58 times less return on investment than Bank of Communications. In addition to that, Guangdong Shenglu is 1.71 times more volatile than Bank of Communications. It trades about 0.04 of its total potential returns per unit of risk. Bank of Communications is currently generating about 0.17 per unit of volatility. If you would invest 709.00 in Bank of Communications on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Bank of Communications or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Bank of Communications
Performance |
| Timeline |
| Guangdong Shenglu |
| Bank of Communications |
Guangdong Shenglu and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Bank of Communications
The main advantage of trading using opposite Guangdong Shenglu and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu 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.| Guangdong Shenglu vs. China Railway Materials | Guangdong Shenglu vs. Xinke Material | Guangdong Shenglu vs. Orinko Advanced Plastics | Guangdong Shenglu vs. Chongqing Sulian Plastic |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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