Correlation Between Bank of Communications and Sichuan Yahua
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By analyzing existing cross correlation between Bank of Communications and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Bank of Communications and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Sichuan Yahua.
Diversification Opportunities for Bank of Communications and Sichuan Yahua
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Sichuan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Bank of Communications i.e., Bank of Communications and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Bank of Communications and Sichuan Yahua
Assuming the 90 days trading horizon Bank of Communications is expected to generate 0.46 times more return on investment than Sichuan Yahua. However, Bank of Communications is 2.17 times less risky than Sichuan Yahua. It trades about 0.04 of its potential returns per unit of risk. Sichuan Yahua Industrial is currently generating about -0.17 per unit of risk. If you would invest 733.00 in Bank of Communications on October 12, 2024 and sell it today you would earn a total of 7.00 from holding Bank of Communications or generate 0.95% 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. Sichuan Yahua Industrial
Performance |
| Timeline |
| Bank of Communications |
| Sichuan Yahua Industrial |
Bank of Communications and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Sichuan Yahua
The main advantage of trading using opposite Bank of Communications and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua's long position.The idea behind Bank of Communications and Sichuan Yahua Industrial 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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