Correlation Between Gansu Jiu and Bank of China
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By analyzing existing cross correlation between Gansu Jiu Steel and Bank of China, you can compare the effects of market volatilities on Gansu Jiu 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 Gansu Jiu with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Bank of China.
Diversification Opportunities for Gansu Jiu and Bank of China
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gansu and Bank is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel 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 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 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 Gansu Jiu i.e., Gansu Jiu and Bank of China go up and down completely randomly.
Pair Corralation between Gansu Jiu and Bank of China
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 8.59 times less return on investment than Bank of China. In addition to that, Gansu Jiu is 1.38 times more volatile than Bank of China. It trades about 0.01 of its total potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of volatility. If you would invest 295.00 in Bank of China on September 2, 2024 and sell it today you would earn a total of 206.00 from holding Bank of China or generate 69.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Bank of China
Performance |
| Timeline |
| Gansu Jiu Steel |
| Bank of China |
Gansu Jiu and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Bank of China
The main advantage of trading using opposite Gansu Jiu and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu 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.| Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Chengtun Mining Group | Gansu Jiu vs. Uroica Mining Safety | Gansu Jiu vs. Beijing HuaYuanYiTong Thermal |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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