Correlation Between Bank of China and Shenwu Energy
Specify exactly 2 symbols:
By analyzing existing cross correlation between Bank of China and Shenwu Energy Saving, you can compare the effects of market volatilities on Bank of China and Shenwu Energy 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 Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shenwu Energy.
Diversification Opportunities for Bank of China and Shenwu Energy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Shenwu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving 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 Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Bank of China i.e., Bank of China and Shenwu Energy go up and down completely randomly.
Pair Corralation between Bank of China and Shenwu Energy
Assuming the 90 days trading horizon Bank of China is expected to generate 2.43 times less return on investment than Shenwu Energy. But when comparing it to its historical volatility, Bank of China is 4.73 times less risky than Shenwu Energy. It trades about 0.05 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Shenwu Energy Saving on November 7, 2024 and sell it today you would lose (3.00) from holding Shenwu Energy Saving or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shenwu Energy Saving
Performance |
| Timeline |
| Bank of China |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Shenwu Energy Saving |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of China and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shenwu Energy
The main advantage of trading using opposite Bank of China and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.The idea behind Bank of China and Shenwu Energy Saving pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |