Correlation Between Bank of China and Tongyu Communication
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By analyzing existing cross correlation between Bank of China and Tongyu Communication, you can compare the effects of market volatilities on Bank of China and Tongyu Communication 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 Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Tongyu Communication.
Diversification Opportunities for Bank of China and Tongyu Communication
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Tongyu is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Bank of China i.e., Bank of China and Tongyu Communication go up and down completely randomly.
Pair Corralation between Bank of China and Tongyu Communication
Assuming the 90 days trading horizon Bank of China is expected to generate 1.82 times less return on investment than Tongyu Communication. But when comparing it to its historical volatility, Bank of China is 2.95 times less risky than Tongyu Communication. It trades about 0.07 of its potential returns per unit of risk. Tongyu Communication is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Tongyu Communication on September 2, 2024 and sell it today you would earn a total of 434.00 from holding Tongyu Communication or generate 35.6% 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. Tongyu Communication
Performance |
| Timeline |
| Bank of China |
| Tongyu Communication |
Bank of China and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Tongyu Communication
The main advantage of trading using opposite Bank of China and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Bank of China vs. Marssenger Kitchenware Co | Bank of China vs. Thinkingdom Media Group | Bank of China vs. Hengdian Entertainment Co | Bank of China vs. Lander Sports Development |
| Tongyu Communication vs. Industrial and Commercial | Tongyu Communication vs. Kweichow Moutai Co | Tongyu Communication vs. Agricultural Bank of | Tongyu Communication vs. China Mobile Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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