Correlation Between Bank of China and Hainan Shuangcheng
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By analyzing existing cross correlation between Bank of China and Hainan Shuangcheng Pharmaceut, you can compare the effects of market volatilities on Bank of China and Hainan Shuangcheng 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 Hainan Shuangcheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Hainan Shuangcheng.
Diversification Opportunities for Bank of China and Hainan Shuangcheng
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Hainan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Hainan Shuangcheng Pharmaceut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Shuangcheng 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 Hainan Shuangcheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Shuangcheng has no effect on the direction of Bank of China i.e., Bank of China and Hainan Shuangcheng go up and down completely randomly.
Pair Corralation between Bank of China and Hainan Shuangcheng
Assuming the 90 days trading horizon Bank of China is expected to generate 0.14 times more return on investment than Hainan Shuangcheng. However, Bank of China is 7.3 times less risky than Hainan Shuangcheng. It trades about 0.19 of its potential returns per unit of risk. Hainan Shuangcheng Pharmaceut is currently generating about -0.27 per unit of risk. If you would invest 482.00 in Bank of China on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Bank of China or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of China vs. Hainan Shuangcheng Pharmaceut
Performance |
| Timeline |
| Bank of China |
| Hainan Shuangcheng |
Bank of China and Hainan Shuangcheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Hainan Shuangcheng
The main advantage of trading using opposite Bank of China and Hainan Shuangcheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Hainan Shuangcheng 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 Hainan Shuangcheng will offset losses from the drop in Hainan Shuangcheng's long position.| Bank of China vs. China Minmetals Rare | Bank of China vs. China Eastern Airlines | Bank of China vs. Metro Investment Development | Bank of China vs. Cultural Investment Holdings |
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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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