Correlation Between Dongguan Tarry and Bank of China
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By analyzing existing cross correlation between Dongguan Tarry Electronics and Bank of China, you can compare the effects of market volatilities on Dongguan Tarry 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 Dongguan Tarry with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongguan Tarry and Bank of China.
Diversification Opportunities for Dongguan Tarry and Bank of China
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongguan and Bank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dongguan Tarry Electronics 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 Dongguan Tarry 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 Dongguan Tarry Electronics 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 Dongguan Tarry i.e., Dongguan Tarry and Bank of China go up and down completely randomly.
Pair Corralation between Dongguan Tarry and Bank of China
Assuming the 90 days trading horizon Dongguan Tarry Electronics is expected to generate 2.88 times more return on investment than Bank of China. However, Dongguan Tarry is 2.88 times more volatile than Bank of China. It trades about 0.04 of its potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of risk. If you would invest 5,064 in Dongguan Tarry Electronics on September 4, 2024 and sell it today you would earn a total of 1,085 from holding Dongguan Tarry Electronics or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongguan Tarry Electronics vs. Bank of China
Performance |
| Timeline |
| Dongguan Tarry Elect |
| Bank of China |
Dongguan Tarry and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongguan Tarry and Bank of China
The main advantage of trading using opposite Dongguan Tarry and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongguan Tarry 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.| Dongguan Tarry vs. Bank of China | Dongguan Tarry vs. Kweichow Moutai Co | Dongguan Tarry vs. PetroChina Co Ltd | Dongguan Tarry vs. Bank of Communications |
| Bank of China vs. Servyou Software Group | Bank of China vs. Keli Sensing Technology | Bank of China vs. Linewell Software Co | Bank of China vs. Bus Online 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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