Correlation Between Bank of China and Fujian Longzhou
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By analyzing existing cross correlation between Bank of China and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Bank of China and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Fujian Longzhou.
Diversification Opportunities for Bank of China and Fujian Longzhou
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Fujian is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Bank of China i.e., Bank of China and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Bank of China and Fujian Longzhou
Assuming the 90 days trading horizon Bank of China is expected to generate 0.49 times more return on investment than Fujian Longzhou. However, Bank of China is 2.03 times less risky than Fujian Longzhou. It trades about 0.06 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.07 per unit of risk. If you would invest 537.00 in Bank of China on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Bank of China or generate 1.49% 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. Fujian Longzhou Transportation
Performance |
| Timeline |
| Bank of China |
| Fujian Longzhou Tran |
Bank of China and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Fujian Longzhou
The main advantage of trading using opposite Bank of China and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Bank of China vs. Zoje Resources Investment | Bank of China vs. Chengdu Xingrong Investment | Bank of China vs. Zbit Semiconductor A | Bank of China vs. Southchip Semiconductor Technology |
| Fujian Longzhou vs. Beijing Baolande Software | Fujian Longzhou vs. Fiberhome Telecommunication Technologies | Fujian Longzhou vs. Jiangsu Hoperun Software | Fujian Longzhou vs. Zhangjiagang Elegant Home |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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