Correlation Between Datang HuaYin and Bank of China
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By analyzing existing cross correlation between Datang HuaYin Electric and Bank of China, you can compare the effects of market volatilities on Datang HuaYin 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 Datang HuaYin with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Bank of China.
Diversification Opportunities for Datang HuaYin and Bank of China
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Datang and Bank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric 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 Datang HuaYin 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 Datang HuaYin Electric 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 Datang HuaYin i.e., Datang HuaYin and Bank of China go up and down completely randomly.
Pair Corralation between Datang HuaYin and Bank of China
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to under-perform the Bank of China. In addition to that, Datang HuaYin is 2.16 times more volatile than Bank of China. It trades about -0.07 of its total potential returns per unit of risk. Bank of China is currently generating about 0.11 per unit of volatility. If you would invest 488.00 in Bank of China on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Bank of China or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Bank of China
Performance |
| Timeline |
| Datang HuaYin Electric |
| Bank of China |
Datang HuaYin and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Bank of China
The main advantage of trading using opposite Datang HuaYin and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin 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.| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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