Correlation Between Bank of Communications and Fujian Newland
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By analyzing existing cross correlation between Bank of Communications and Fujian Newland Computer, you can compare the effects of market volatilities on Bank of Communications and Fujian Newland 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 Bank of Communications with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Fujian Newland.
Diversification Opportunities for Bank of Communications and Fujian Newland
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Fujian is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Bank of Communications 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 Bank of Communications are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Bank of Communications i.e., Bank of Communications and Fujian Newland go up and down completely randomly.
Pair Corralation between Bank of Communications and Fujian Newland
Assuming the 90 days trading horizon Bank of Communications is expected to generate 1.01 times less return on investment than Fujian Newland. But when comparing it to its historical volatility, Bank of Communications is 1.97 times less risky than Fujian Newland. It trades about 0.08 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Fujian Newland Computer on October 27, 2024 and sell it today you would earn a total of 576.00 from holding Fujian Newland Computer or generate 40.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. Fujian Newland Computer
Performance |
| Timeline |
| Bank of Communications |
| Fujian Newland Computer |
Bank of Communications and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Fujian Newland
The main advantage of trading using opposite Bank of Communications and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Bank of Communications vs. COL Digital Publishing | Bank of Communications vs. Shanghai Action Education | Bank of Communications vs. Xinhua Winshare Publishing | Bank of Communications vs. Yankershop Food Co |
| Fujian Newland vs. Shantui Construction Machinery | Fujian Newland vs. Senci Electric Machinery | Fujian Newland vs. Linzhou Heavy Machinery | Fujian Newland vs. Fujian Oriental Silver |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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