Correlation Between Bank of Communications and New Hope
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By analyzing existing cross correlation between Bank of Communications and New Hope Dairy, you can compare the effects of market volatilities on Bank of Communications and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and New Hope.
Diversification Opportunities for Bank of Communications and New Hope
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and New is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Bank of Communications i.e., Bank of Communications and New Hope go up and down completely randomly.
Pair Corralation between Bank of Communications and New Hope
Assuming the 90 days trading horizon Bank of Communications is expected to under-perform the New Hope. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Communications is 1.93 times less risky than New Hope. The stock trades about -0.3 of its potential returns per unit of risk. The New Hope Dairy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,428 in New Hope Dairy on October 25, 2024 and sell it today you would earn a total of 96.00 from holding New Hope Dairy or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. New Hope Dairy
Performance |
| Timeline |
| Bank of Communications |
| New Hope Dairy |
Bank of Communications and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and New Hope
The main advantage of trading using opposite Bank of Communications and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Bank of Communications vs. Bank of China | Bank of Communications vs. Kweichow Moutai Co | Bank of Communications vs. PetroChina Co Ltd | Bank of Communications vs. China Mobile Limited |
| New Hope vs. Agricultural Bank of | New Hope vs. Postal Savings Bank | New Hope vs. Bank of Communications | New Hope vs. China Merchants Bank |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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