Correlation Between Bank of China Limited and Dezhan HealthCare
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By analyzing existing cross correlation between Bank of China and Dezhan HealthCare Co, you can compare the effects of market volatilities on Bank of China Limited and Dezhan HealthCare 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 Limited with a short position of Dezhan HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Dezhan HealthCare.
Diversification Opportunities for Bank of China Limited and Dezhan HealthCare
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Dezhan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Dezhan HealthCare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dezhan HealthCare and Bank of China Limited 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 Dezhan HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dezhan HealthCare has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Dezhan HealthCare go up and down completely randomly.
Pair Corralation between Bank of China Limited and Dezhan HealthCare
Assuming the 90 days trading horizon Bank of China is expected to under-perform the Dezhan HealthCare. But the stock apears to be less risky and, when comparing its historical volatility, Bank of China is 2.36 times less risky than Dezhan HealthCare. The stock trades about -0.04 of its potential returns per unit of risk. The Dezhan HealthCare Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Dezhan HealthCare Co on November 27, 2024 and sell it today you would earn a total of 41.00 from holding Dezhan HealthCare Co or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Dezhan HealthCare Co
Performance |
| Timeline |
| Bank of China Limited |
| Dezhan HealthCare |
Bank of China Limited and Dezhan HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Dezhan HealthCare
The main advantage of trading using opposite Bank of China Limited and Dezhan HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Dezhan HealthCare 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 Dezhan HealthCare will offset losses from the drop in Dezhan HealthCare's long position.| Bank of China Limited vs. China World Trade | Bank of China Limited vs. Henan Shuanghui Investment | Bank of China Limited vs. Huawen Media Investment | Bank of China Limited vs. Zhongrun Resources Investment |
| Dezhan HealthCare vs. Shanghai Shibei Hi Tech | Dezhan HealthCare vs. Fujian Newland Computer | Dezhan HealthCare vs. Hubei Tech Semiconductors | Dezhan HealthCare vs. Yuanjie Semiconductor Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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