Correlation Between Bank of Communications and GuoChuang Software
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By analyzing existing cross correlation between Bank of Communications and GuoChuang Software Co, you can compare the effects of market volatilities on Bank of Communications and GuoChuang Software 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 GuoChuang Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and GuoChuang Software.
Diversification Opportunities for Bank of Communications and GuoChuang Software
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and GuoChuang is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and GuoChuang Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GuoChuang Software 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 GuoChuang Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GuoChuang Software has no effect on the direction of Bank of Communications i.e., Bank of Communications and GuoChuang Software go up and down completely randomly.
Pair Corralation between Bank of Communications and GuoChuang Software
Assuming the 90 days trading horizon Bank of Communications is expected to generate 5.67 times less return on investment than GuoChuang Software. But when comparing it to its historical volatility, Bank of Communications is 2.72 times less risky than GuoChuang Software. It trades about 0.06 of its potential returns per unit of risk. GuoChuang Software Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,715 in GuoChuang Software Co on September 12, 2024 and sell it today you would earn a total of 1,197 from holding GuoChuang Software Co or generate 69.8% 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. GuoChuang Software Co
Performance |
| Timeline |
| Bank of Communications |
| GuoChuang Software |
Bank of Communications and GuoChuang Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and GuoChuang Software
The main advantage of trading using opposite Bank of Communications and GuoChuang Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, GuoChuang Software 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 GuoChuang Software will offset losses from the drop in GuoChuang Software'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 |
| GuoChuang Software vs. Gansu Jiu Steel | GuoChuang Software vs. Shandong Mining Machinery | GuoChuang Software vs. Aba Chemicals Corp | GuoChuang Software 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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