Correlation Between Bank of China and Shenzhen Clou
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By analyzing existing cross correlation between Bank of China and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Bank of China and Shenzhen Clou 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 Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shenzhen Clou.
Diversification Opportunities for Bank of China and Shenzhen Clou
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Shenzhen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics 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 Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Bank of China i.e., Bank of China and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Bank of China and Shenzhen Clou
Assuming the 90 days trading horizon Bank of China is expected to generate 1.31 times less return on investment than Shenzhen Clou. But when comparing it to its historical volatility, Bank of China is 3.72 times less risky than Shenzhen Clou. It trades about 0.38 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Shenzhen Clou Electronics on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Shenzhen Clou Electronics or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of China vs. Shenzhen Clou Electronics
Performance |
| Timeline |
| Bank of China |
| Shenzhen Clou Electronics |
Bank of China and Shenzhen Clou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shenzhen Clou
The main advantage of trading using opposite Bank of China and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shenzhen Clou 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 Shenzhen Clou will offset losses from the drop in Shenzhen Clou's long position.| Bank of China vs. Chenzhou Jingui Silver | Bank of China vs. Hangzhou Pinming Software | Bank of China vs. Shandong Mining Machinery | Bank of China vs. Tibet Huayu Mining |
| Shenzhen Clou vs. Agricultural Bank of | Shenzhen Clou vs. Industrial and Commercial | Shenzhen Clou vs. Bank of China | Shenzhen Clou vs. PetroChina Co Ltd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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