Correlation Between Bank of Communications and Linzhou Heavy
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By analyzing existing cross correlation between Bank of Communications and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Bank of Communications and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Linzhou Heavy.
Diversification Opportunities for Bank of Communications and Linzhou Heavy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Linzhou is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Bank of Communications i.e., Bank of Communications and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Bank of Communications and Linzhou Heavy
Assuming the 90 days trading horizon Bank of Communications is expected to generate 1.33 times less return on investment than Linzhou Heavy. But when comparing it to its historical volatility, Bank of Communications is 2.64 times less risky than Linzhou Heavy. It trades about 0.09 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Linzhou Heavy Machinery on September 28, 2024 and sell it today you would earn a total of 155.00 from holding Linzhou Heavy Machinery or generate 63.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank of Communications vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Bank of Communications |
| Linzhou Heavy Machinery |
Bank of Communications and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Linzhou Heavy
The main advantage of trading using opposite Bank of Communications and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Bank of Communications vs. Industrial and Commercial | Bank of Communications vs. Kweichow Moutai Co | Bank of Communications vs. Agricultural Bank of | Bank of Communications vs. China Mobile Limited |
| Linzhou Heavy vs. Bank of China | Linzhou Heavy vs. Kweichow Moutai Co | Linzhou Heavy vs. PetroChina Co Ltd | Linzhou Heavy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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