Correlation Between Bank of China and Guangdong Qunxing
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By analyzing existing cross correlation between Bank of China and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Bank of China and Guangdong Qunxing 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 Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Guangdong Qunxing.
Diversification Opportunities for Bank of China and Guangdong Qunxing
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Guangdong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys 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 Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Bank of China i.e., Bank of China and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Bank of China and Guangdong Qunxing
Assuming the 90 days trading horizon Bank of China is expected to generate 1.01 times less return on investment than Guangdong Qunxing. But when comparing it to its historical volatility, Bank of China is 2.21 times less risky than Guangdong Qunxing. It trades about 0.09 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 569.00 in Guangdong Qunxing Toys on September 12, 2024 and sell it today you would earn a total of 274.00 from holding Guangdong Qunxing Toys or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank of China vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Bank of China |
| Guangdong Qunxing Toys |
Bank of China and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Guangdong Qunxing
The main advantage of trading using opposite Bank of China and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing'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 |
| Guangdong Qunxing vs. Lutian Machinery Co | Guangdong Qunxing vs. PetroChina Co Ltd | Guangdong Qunxing vs. Bank of China | Guangdong Qunxing vs. Gansu Jiu Steel |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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