Correlation Between Bank of Communications and Success Electronics
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By analyzing existing cross correlation between Bank of Communications and Success Electronics, you can compare the effects of market volatilities on Bank of Communications and Success Electronics 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 Success Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Success Electronics.
Diversification Opportunities for Bank of Communications and Success Electronics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Success is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Success Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Success Electronics 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 Success Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Success Electronics has no effect on the direction of Bank of Communications i.e., Bank of Communications and Success Electronics go up and down completely randomly.
Pair Corralation between Bank of Communications and Success Electronics
Assuming the 90 days trading horizon Bank of Communications is expected to generate 0.42 times more return on investment than Success Electronics. However, Bank of Communications is 2.38 times less risky than Success Electronics. It trades about 0.09 of its potential returns per unit of risk. Success Electronics is currently generating about -0.03 per unit of risk. If you would invest 444.00 in Bank of Communications on September 3, 2024 and sell it today you would earn a total of 289.00 from holding Bank of Communications or generate 65.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. Success Electronics
Performance |
| Timeline |
| Bank of Communications |
| Success Electronics |
Bank of Communications and Success Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Success Electronics
The main advantage of trading using opposite Bank of Communications and Success Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Success Electronics 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 Success Electronics will offset losses from the drop in Success Electronics' long position.The idea behind Bank of Communications and Success Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Success Electronics vs. Agricultural Bank of | Success Electronics vs. China Construction Bank | Success Electronics vs. Postal Savings Bank | Success Electronics vs. Bank of Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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