Correlation Between Bank of Changsha and Cultural Investment
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By analyzing existing cross correlation between Bank of Changsha and Cultural Investment Holdings, you can compare the effects of market volatilities on Bank of Changsha and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Changsha and Cultural Investment.
Diversification Opportunities for Bank of Changsha and Cultural Investment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Cultural is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Changsha and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Bank of Changsha i.e., Bank of Changsha and Cultural Investment go up and down completely randomly.
Pair Corralation between Bank of Changsha and Cultural Investment
Assuming the 90 days trading horizon Bank of Changsha is expected to generate 6.37 times less return on investment than Cultural Investment. But when comparing it to its historical volatility, Bank of Changsha is 1.49 times less risky than Cultural Investment. It trades about 0.03 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 158.00 in Cultural Investment Holdings on September 5, 2024 and sell it today you would earn a total of 67.00 from holding Cultural Investment Holdings or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Changsha vs. Cultural Investment Holdings
Performance |
| Timeline |
| Bank of Changsha |
| Cultural Investment |
Bank of Changsha and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Changsha and Cultural Investment
The main advantage of trading using opposite Bank of Changsha and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Changsha position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Bank of Changsha vs. Shanghai Rendu Biotechnology | Bank of Changsha vs. Shenzhen Clou Electronics | Bank of Changsha vs. Leyard Optoelectronic | Bank of Changsha vs. Fuzhou Rockchip Electronics |
| Cultural Investment vs. Anhui Gujing Distillery | Cultural Investment vs. Shandong Sinoglory Health | Cultural Investment vs. Shanghai Jinfeng Wine | Cultural Investment vs. Everjoy Health 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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