Correlation Between Inner Mongolia and Bank of China
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By analyzing existing cross correlation between Inner Mongolia Furui and Bank of China, you can compare the effects of market volatilities on Inner Mongolia 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 Inner Mongolia with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Bank of China.
Diversification Opportunities for Inner Mongolia and Bank of China
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inner and Bank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia Furui 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 Inner Mongolia 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 Inner Mongolia Furui 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 Inner Mongolia i.e., Inner Mongolia and Bank of China go up and down completely randomly.
Pair Corralation between Inner Mongolia and Bank of China
Assuming the 90 days trading horizon Inner Mongolia Furui is expected to under-perform the Bank of China. In addition to that, Inner Mongolia is 2.56 times more volatile than Bank of China. It trades about -0.06 of its total potential returns per unit of risk. Bank of China is currently generating about 0.07 per unit of volatility. If you would invest 444.00 in Bank of China on September 2, 2024 and sell it today you would earn a total of 57.00 from holding Bank of China or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia Furui vs. Bank of China
Performance |
| Timeline |
| Inner Mongolia Furui |
| Bank of China |
Inner Mongolia and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Bank of China
The main advantage of trading using opposite Inner Mongolia and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia 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.| Inner Mongolia vs. Peoples Insurance of | Inner Mongolia vs. Nuode Investment Co | Inner Mongolia vs. Heren Health Co | Inner Mongolia vs. Zhongshan Public Utilities |
| Bank of China vs. Marssenger Kitchenware Co | Bank of China vs. Thinkingdom Media Group | Bank of China vs. Hengdian Entertainment Co | Bank of China vs. Lander Sports Development |
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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