Correlation Between Bank of Communications and Xingguang Agricultural
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By analyzing existing cross correlation between Bank of Communications and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Bank of Communications and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Communications and Xingguang Agricultural.
Diversification Opportunities for Bank of Communications and Xingguang Agricultural
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Xingguang is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Communications and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Bank of Communications i.e., Bank of Communications and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Bank of Communications and Xingguang Agricultural
Assuming the 90 days trading horizon Bank of Communications is expected to generate 0.4 times more return on investment than Xingguang Agricultural. However, Bank of Communications is 2.47 times less risky than Xingguang Agricultural. It trades about 0.05 of its potential returns per unit of risk. Xingguang Agricultural Mach is currently generating about -0.02 per unit of risk. If you would invest 634.00 in Bank of Communications on October 25, 2024 and sell it today you would earn a total of 83.00 from holding Bank of Communications or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Communications vs. Xingguang Agricultural Mach
Performance |
| Timeline |
| Bank of Communications |
| Xingguang Agricultural |
Bank of Communications and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Communications and Xingguang Agricultural
The main advantage of trading using opposite Bank of Communications and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Communications position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural'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 |
| Xingguang Agricultural vs. Kweichow Moutai Co | Xingguang Agricultural vs. Contemporary Amperex Technology | Xingguang Agricultural vs. Beijing Roborock Technology | Xingguang Agricultural vs. BYD Co Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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