Correlation Between Bank of China Limited and De Rucci
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By analyzing existing cross correlation between Bank of China and De Rucci Healthy, you can compare the effects of market volatilities on Bank of China Limited and De Rucci 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 De Rucci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and De Rucci.
Diversification Opportunities for Bank of China Limited and De Rucci
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 001323 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and De Rucci Healthy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Rucci Healthy 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 De Rucci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Rucci Healthy has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and De Rucci go up and down completely randomly.
Pair Corralation between Bank of China Limited and De Rucci
Assuming the 90 days trading horizon Bank of China is expected to generate 0.85 times more return on investment than De Rucci. However, Bank of China is 1.17 times less risky than De Rucci. It trades about 0.19 of its potential returns per unit of risk. De Rucci Healthy is currently generating about -0.19 per unit of risk. If you would invest 529.00 in Bank of China on November 22, 2024 and sell it today you would earn a total of 24.00 from holding Bank of China or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. De Rucci Healthy
Performance |
| Timeline |
| Bank of China Limited |
| De Rucci Healthy |
Bank of China Limited and De Rucci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and De Rucci
The main advantage of trading using opposite Bank of China Limited and De Rucci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, De Rucci 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 De Rucci will offset losses from the drop in De Rucci's long position.The idea behind Bank of China and De Rucci Healthy 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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