Correlation Between Bank of Changsha and Zhongyin Babi
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By analyzing existing cross correlation between Bank of Changsha and Zhongyin Babi Food, you can compare the effects of market volatilities on Bank of Changsha and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Changsha and Zhongyin Babi.
Diversification Opportunities for Bank of Changsha and Zhongyin Babi
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Zhongyin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Changsha and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Bank of Changsha i.e., Bank of Changsha and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Bank of Changsha and Zhongyin Babi
Assuming the 90 days trading horizon Bank of Changsha is expected to generate 5.02 times less return on investment than Zhongyin Babi. But when comparing it to its historical volatility, Bank of Changsha is 2.12 times less risky than Zhongyin Babi. It trades about 0.1 of its potential returns per unit of risk. Zhongyin Babi Food is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,708 in Zhongyin Babi Food on September 12, 2024 and sell it today you would earn a total of 280.00 from holding Zhongyin Babi Food or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Changsha vs. Zhongyin Babi Food
Performance |
| Timeline |
| Bank of Changsha |
| Zhongyin Babi Food |
Bank of Changsha and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Changsha and Zhongyin Babi
The main advantage of trading using opposite Bank of Changsha and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Changsha position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| Bank of Changsha vs. Panda Dairy Corp | Bank of Changsha vs. State Grid InformationCommunication | Bank of Changsha vs. Suzhou Weizhixiang Food | Bank of Changsha vs. Zhongyin Babi Food |
| Zhongyin Babi vs. China Petroleum Chemical | Zhongyin Babi vs. PetroChina Co Ltd | Zhongyin Babi vs. China State Construction | Zhongyin Babi vs. China Railway 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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