Correlation Between Bank of China and Guocheng Mining
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By analyzing existing cross correlation between Bank of China and Guocheng Mining Co, you can compare the effects of market volatilities on Bank of China and Guocheng Mining 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 Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Guocheng Mining.
Diversification Opportunities for Bank of China and Guocheng Mining
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Guocheng is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining 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 Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Bank of China i.e., Bank of China and Guocheng Mining go up and down completely randomly.
Pair Corralation between Bank of China and Guocheng Mining
Assuming the 90 days trading horizon Bank of China is expected to generate 11.26 times less return on investment than Guocheng Mining. But when comparing it to its historical volatility, Bank of China is 2.91 times less risky than Guocheng Mining. It trades about 0.02 of its potential returns per unit of risk. Guocheng Mining Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Guocheng Mining Co on August 30, 2024 and sell it today you would earn a total of 127.00 from holding Guocheng Mining Co or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Guocheng Mining Co
Performance |
| Timeline |
| Bank of China |
| Guocheng Mining |
Bank of China and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Guocheng Mining
The main advantage of trading using opposite Bank of China and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Guocheng Mining 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.| Bank of China vs. Kuangda Technology Group | Bank of China vs. Olympic Circuit Technology | Bank of China vs. Western Superconducting Tech | Bank of China vs. Sinocelltech Group |
| Guocheng Mining vs. Bank of China | Guocheng Mining vs. Kweichow Moutai Co | Guocheng Mining vs. PetroChina Co Ltd | Guocheng Mining vs. Bank of Communications |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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