Correlation Between Gansu Jiu and Bank of Communications
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By analyzing existing cross correlation between Gansu Jiu Steel and Bank of Communications, you can compare the effects of market volatilities on Gansu Jiu 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 Gansu Jiu with a short position of Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Bank of Communications.
Diversification Opportunities for Gansu Jiu and Bank of Communications
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gansu and Bank is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel 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 Gansu Jiu 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 Gansu Jiu Steel 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 Gansu Jiu i.e., Gansu Jiu and Bank of Communications go up and down completely randomly.
Pair Corralation between Gansu Jiu and Bank of Communications
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Bank of Communications. In addition to that, Gansu Jiu is 1.49 times more volatile than Bank of Communications. It trades about -0.49 of its total potential returns per unit of risk. Bank of Communications is currently generating about 0.01 per unit of volatility. If you would invest 740.00 in Bank of Communications on October 9, 2024 and sell it today you would earn a total of 1.00 from holding Bank of Communications or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Bank of Communications
Performance |
| Timeline |
| Gansu Jiu Steel |
| Bank of Communications |
Gansu Jiu and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Bank of Communications
The main advantage of trading using opposite Gansu Jiu and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu 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.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Shandong Gold Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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