Correlation Between Bank of Communications and Dongguan Tarry
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By analyzing existing cross correlation between Bank of Communications and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Bank of Communications and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Dongguan Tarry.
Diversification Opportunities for Bank of Communications and Dongguan Tarry
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Dongguan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Bank of Communications i.e., Bank of Communications and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Bank of Communications and Dongguan Tarry
Assuming the 90 days trading horizon Bank of Communications is expected to generate 1.34 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, Bank of Communications is 2.72 times less risky than Dongguan Tarry. It trades about 0.08 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,064 in Dongguan Tarry Electronics on September 4, 2024 and sell it today you would earn a total of 1,085 from holding Dongguan Tarry Electronics or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Bank of Communications |
| Dongguan Tarry Elect |
Bank of Communications and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Dongguan Tarry
The main advantage of trading using opposite Bank of Communications and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Bank of Communications vs. Ming Yang Smart | Bank of Communications vs. 159681 | Bank of Communications vs. 159005 | Bank of Communications vs. Loctek Ergonomic Technology |
| Dongguan Tarry vs. Bank of China | Dongguan Tarry vs. Kweichow Moutai Co | Dongguan Tarry vs. PetroChina Co Ltd | Dongguan Tarry 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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