Correlation Between Changchun Faway and Bank of China
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By analyzing existing cross correlation between Changchun Faway Automobile and Bank of China, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Bank of China.
Diversification Opportunities for Changchun Faway and Bank of China
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Bank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile 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 Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and Bank of China go up and down completely randomly.
Pair Corralation between Changchun Faway and Bank of China
Assuming the 90 days trading horizon Changchun Faway is expected to generate 4.73 times less return on investment than Bank of China. In addition to that, Changchun Faway is 2.3 times more volatile than Bank of China. It trades about 0.03 of its total potential returns per unit of risk. Bank of China is currently generating about 0.33 per unit of volatility. If you would invest 479.00 in Bank of China on September 13, 2024 and sell it today you would earn a total of 34.00 from holding Bank of China or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Bank of China
Performance |
| Timeline |
| Changchun Faway Auto |
| Bank of China |
Changchun Faway and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Bank of China
The main advantage of trading using opposite Changchun Faway and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. BeiGene | Changchun Faway vs. Kweichow Moutai Co | Changchun Faway vs. Beijing Roborock Technology | Changchun Faway vs. G bits Network Technology |
| Bank of China vs. AUPU Home Style | Bank of China vs. HaiXin Foods Co | Bank of China vs. JuneYao Dairy Co | Bank of China vs. Zhengzhou Qianweiyangchu Food |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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