Correlation Between Aba Chemicals and Bank of Communications
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By analyzing existing cross correlation between Aba Chemicals Corp and Bank of Communications, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Bank of Communications.
Diversification Opportunities for Aba Chemicals and Bank of Communications
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aba and Bank is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp 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 Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Bank of Communications go up and down completely randomly.
Pair Corralation between Aba Chemicals and Bank of Communications
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Bank of Communications. In addition to that, Aba Chemicals is 1.94 times more volatile than Bank of Communications. It trades about -0.21 of its total potential returns per unit of risk. Bank of Communications is currently generating about -0.21 per unit of volatility. If you would invest 768.00 in Bank of Communications on October 24, 2024 and sell it today you would lose (39.00) from holding Bank of Communications or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Bank of Communications
Performance |
| Timeline |
| Aba Chemicals Corp |
| Bank of Communications |
Aba Chemicals and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Bank of Communications
The main advantage of trading using opposite Aba Chemicals and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Jiangsu Phoenix Publishing | Aba Chemicals vs. Xiamen Goldenhome Co | Aba Chemicals vs. Ningbo Homelink Eco iTech | Aba Chemicals vs. Nanxing Furniture Machinery |
| Bank of Communications vs. Guangzhou Zhujiang Brewery | Bank of Communications vs. Zoy Home Furnishing | Bank of Communications vs. Chongqing Brewery Co | Bank of Communications vs. Xiamen Goldenhome 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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