Correlation Between Bank of Changsha and Panda Dairy
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By analyzing existing cross correlation between Bank of Changsha and Panda Dairy Corp, you can compare the effects of market volatilities on Bank of Changsha and Panda Dairy 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 Changsha with a short position of Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Changsha and Panda Dairy.
Diversification Opportunities for Bank of Changsha and Panda Dairy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Panda is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Changsha and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp and Bank of Changsha 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 Changsha are associated (or correlated) with Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Bank of Changsha i.e., Bank of Changsha and Panda Dairy go up and down completely randomly.
Pair Corralation between Bank of Changsha and Panda Dairy
Assuming the 90 days trading horizon Bank of Changsha is expected to generate 5.08 times less return on investment than Panda Dairy. But when comparing it to its historical volatility, Bank of Changsha is 3.81 times less risky than Panda Dairy. It trades about 0.14 of its potential returns per unit of risk. Panda Dairy Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,422 in Panda Dairy Corp on September 13, 2024 and sell it today you would earn a total of 490.00 from holding Panda Dairy Corp or generate 20.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Changsha vs. Panda Dairy Corp
Performance |
| Timeline |
| Bank of Changsha |
| Panda Dairy Corp |
Bank of Changsha and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Changsha and Panda Dairy
The main advantage of trading using opposite Bank of Changsha and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Changsha position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy's long position.| Bank of Changsha vs. Hainan Airlines Co | Bank of Changsha vs. Shantui Construction Machinery | Bank of Changsha vs. Quectel Wireless Solutions | Bank of Changsha vs. Anhui Huilong Agricultural |
| Panda Dairy vs. Nanjing Putian Telecommunications | Panda Dairy vs. Tianjin Realty Development | Panda Dairy vs. Kangyue Technology Co | Panda Dairy vs. Shenzhen Hifuture Electric |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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