Correlation Between Bank of China and Tianshan Aluminum
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By analyzing existing cross correlation between Bank of China and Tianshan Aluminum Group, you can compare the effects of market volatilities on Bank of China and Tianshan Aluminum 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 Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Tianshan Aluminum.
Diversification Opportunities for Bank of China and Tianshan Aluminum
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Tianshan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum 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 Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Bank of China i.e., Bank of China and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Bank of China and Tianshan Aluminum
Assuming the 90 days trading horizon Bank of China is expected to generate 0.39 times more return on investment than Tianshan Aluminum. However, Bank of China is 2.55 times less risky than Tianshan Aluminum. It trades about 0.13 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about -0.02 per unit of risk. If you would invest 490.00 in Bank of China on August 30, 2024 and sell it today you would earn a total of 14.00 from holding Bank of China or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Bank of China |
| Tianshan Aluminum |
Bank of China and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Tianshan Aluminum
The main advantage of trading using opposite Bank of China and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Bank of China vs. Kuangda Technology Group | Bank of China vs. Olympic Circuit Technology | Bank of China vs. Western Superconducting Tech | Bank of China vs. Sinocelltech Group |
| Tianshan Aluminum vs. Lutian Machinery Co | Tianshan Aluminum vs. Changshu Tongrun Auto | Tianshan Aluminum vs. PetroChina Co Ltd | Tianshan Aluminum vs. Bank of China |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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