Correlation Between Bank of China and Zoomlion Heavy
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By analyzing existing cross correlation between Bank of China and Zoomlion Heavy Industry, you can compare the effects of market volatilities on Bank of China and Zoomlion Heavy 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 China with a short position of Zoomlion Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Zoomlion Heavy.
Diversification Opportunities for Bank of China and Zoomlion Heavy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Zoomlion is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Zoomlion Heavy Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomlion Heavy Industry and Bank of China 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 China are associated (or correlated) with Zoomlion Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomlion Heavy Industry has no effect on the direction of Bank of China i.e., Bank of China and Zoomlion Heavy go up and down completely randomly.
Pair Corralation between Bank of China and Zoomlion Heavy
Assuming the 90 days trading horizon Bank of China is expected to generate 0.79 times more return on investment than Zoomlion Heavy. However, Bank of China is 1.26 times less risky than Zoomlion Heavy. It trades about 0.1 of its potential returns per unit of risk. Zoomlion Heavy Industry is currently generating about 0.05 per unit of risk. If you would invest 301.00 in Bank of China on September 26, 2024 and sell it today you would earn a total of 242.00 from holding Bank of China or generate 80.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank of China vs. Zoomlion Heavy Industry
Performance |
| Timeline |
| Bank of China |
| Zoomlion Heavy Industry |
Bank of China and Zoomlion Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Zoomlion Heavy
The main advantage of trading using opposite Bank of China and Zoomlion Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Zoomlion Heavy 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 Zoomlion Heavy will offset losses from the drop in Zoomlion Heavy's long position.| Bank of China vs. Railway Signal Communication | Bank of China vs. Eastern Communications Co | Bank of China vs. Tongyu Communication | Bank of China vs. Shenzhen Kexin Communication |
| Zoomlion Heavy vs. Industrial and Commercial | Zoomlion Heavy vs. Agricultural Bank of | Zoomlion Heavy vs. China Construction Bank | Zoomlion Heavy vs. Bank of China |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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