Correlation Between Xiamen Bank and Bank of Suzhou
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By analyzing existing cross correlation between Xiamen Bank Co and Bank of Suzhou, you can compare the effects of market volatilities on Xiamen Bank and Bank of Suzhou 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 Xiamen Bank with a short position of Bank of Suzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Bank of Suzhou.
Diversification Opportunities for Xiamen Bank and Bank of Suzhou
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiamen and Bank is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Bank of Suzhou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Suzhou and Xiamen Bank 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 Xiamen Bank Co are associated (or correlated) with Bank of Suzhou. 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 Suzhou has no effect on the direction of Xiamen Bank i.e., Xiamen Bank and Bank of Suzhou go up and down completely randomly.
Pair Corralation between Xiamen Bank and Bank of Suzhou
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 1.79 times more return on investment than Bank of Suzhou. However, Xiamen Bank is 1.79 times more volatile than Bank of Suzhou. It trades about 0.18 of its potential returns per unit of risk. Bank of Suzhou is currently generating about 0.29 per unit of risk. If you would invest 537.00 in Xiamen Bank Co on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Xiamen Bank Co or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Bank Co vs. Bank of Suzhou
Performance |
| Timeline |
| Xiamen Bank |
| Bank of Suzhou |
Xiamen Bank and Bank of Suzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and Bank of Suzhou
The main advantage of trading using opposite Xiamen Bank and Bank of Suzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank position performs unexpectedly, Bank of Suzhou 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 Suzhou will offset losses from the drop in Bank of Suzhou's long position.| Xiamen Bank vs. China Petroleum Chemical | Xiamen Bank vs. PetroChina Co Ltd | Xiamen Bank vs. China Mobile Limited | Xiamen Bank vs. Industrial and Commercial |
| Bank of Suzhou vs. China Petroleum Chemical | Bank of Suzhou vs. PetroChina Co Ltd | Bank of Suzhou vs. China Mobile Limited | Bank of Suzhou vs. Industrial and Commercial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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