Correlation Between Bank of Communications and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Bank of Communications and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Bank of Communications and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Beijing HuaYuanYiTong.
Diversification Opportunities for Bank of Communications and Beijing HuaYuanYiTong
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Beijing is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Bank of Communications i.e., Bank of Communications and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Bank of Communications and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Bank of Communications is expected to generate 1.0 times less return on investment than Beijing HuaYuanYiTong. But when comparing it to its historical volatility, Bank of Communications is 2.49 times less risky than Beijing HuaYuanYiTong. It trades about 0.2 of its potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Beijing HuaYuanYiTong Thermal on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Beijing HuaYuanYiTong Thermal or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Bank of Communications |
| Beijing HuaYuanYiTong |
Bank of Communications and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Beijing HuaYuanYiTong
The main advantage of trading using opposite Bank of Communications and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Bank of Communications vs. China Petroleum Chemical | Bank of Communications vs. PetroChina Co Ltd | Bank of Communications vs. China Mobile Limited | Bank of Communications vs. Industrial and Commercial |
| Beijing HuaYuanYiTong vs. Gansu Jiu Steel | Beijing HuaYuanYiTong vs. Shandong Mining Machinery | Beijing HuaYuanYiTong vs. Aba Chemicals Corp | Beijing HuaYuanYiTong vs. BlueFocus Communication Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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