Correlation Between Bank of China and Sichuan Fulin
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By analyzing existing cross correlation between Bank of China and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Bank of China and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Sichuan Fulin.
Diversification Opportunities for Bank of China and Sichuan Fulin
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Sichuan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Bank of China i.e., Bank of China and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Bank of China and Sichuan Fulin
Assuming the 90 days trading horizon Bank of China is expected to generate 1.62 times less return on investment than Sichuan Fulin. But when comparing it to its historical volatility, Bank of China is 2.25 times less risky than Sichuan Fulin. It trades about 0.38 of its potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Sichuan Fulin Transportation on September 12, 2024 and sell it today you would earn a total of 88.00 from holding Sichuan Fulin Transportation or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Bank of China |
| Sichuan Fulin Transp |
Bank of China and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Sichuan Fulin
The main advantage of trading using opposite Bank of China and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin'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 |
| Sichuan Fulin vs. Agricultural Bank of | Sichuan Fulin vs. Industrial and Commercial | Sichuan Fulin vs. Bank of China | Sichuan Fulin 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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