Correlation Between Bank of China Limited and HanS Laser
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By analyzing existing cross correlation between Bank of China and HanS Laser Tech, you can compare the effects of market volatilities on Bank of China Limited and HanS Laser 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 HanS Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and HanS Laser.
Diversification Opportunities for Bank of China Limited and HanS Laser
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and HanS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and HanS Laser Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HanS Laser Tech 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 HanS Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HanS Laser Tech has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and HanS Laser go up and down completely randomly.
Pair Corralation between Bank of China Limited and HanS Laser
Assuming the 90 days trading horizon Bank of China Limited is expected to generate 2.14 times less return on investment than HanS Laser. But when comparing it to its historical volatility, Bank of China is 1.83 times less risky than HanS Laser. It trades about 0.06 of its potential returns per unit of risk. HanS Laser Tech is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,949 in HanS Laser Tech on December 2, 2024 and sell it today you would earn a total of 771.00 from holding HanS Laser Tech or generate 39.56% 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. HanS Laser Tech
Performance |
| Timeline |
| Bank of China Limited |
| HanS Laser Tech |
Bank of China Limited and HanS Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and HanS Laser
The main advantage of trading using opposite Bank of China Limited and HanS Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, HanS Laser 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 HanS Laser will offset losses from the drop in HanS Laser's long position.The idea behind Bank of China and HanS Laser Tech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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