Correlation Between Bank of China Limited and Zotye Automobile
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By analyzing existing cross correlation between Bank of China and Zotye Automobile Co, you can compare the effects of market volatilities on Bank of China Limited and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Zotye Automobile.
Diversification Opportunities for Bank of China Limited and Zotye Automobile
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Zotye is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Zotye Automobile go up and down completely randomly.
Pair Corralation between Bank of China Limited and Zotye Automobile
Assuming the 90 days trading horizon Bank of China is expected to under-perform the Zotye Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Bank of China is 2.38 times less risky than Zotye Automobile. The stock trades about -0.04 of its potential returns per unit of risk. The Zotye Automobile Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 204.00 in Zotye Automobile Co on November 27, 2024 and sell it today you would earn a total of 16.00 from holding Zotye Automobile Co or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Zotye Automobile Co
Performance |
| Timeline |
| Bank of China Limited |
| Zotye Automobile |
Bank of China Limited and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Zotye Automobile
The main advantage of trading using opposite Bank of China Limited and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile'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 |
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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 Correlations module to find global opportunities by holding instruments from different markets.
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