Correlation Between Bank of China and Bank of Suzhou
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By analyzing existing cross correlation between Bank of China and Bank of Suzhou, you can compare the effects of market volatilities on Bank of China and Bank of Suzhou 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 Bank of Suzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Bank of Suzhou.
Diversification Opportunities for Bank of China and Bank of Suzhou
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bank is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Bank of Suzhou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Suzhou 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 Bank of Suzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Suzhou has no effect on the direction of Bank of China i.e., Bank of China and Bank of Suzhou go up and down completely randomly.
Pair Corralation between Bank of China and Bank of Suzhou
Assuming the 90 days trading horizon Bank of China is expected to generate 1.54 times less return on investment than Bank of Suzhou. But when comparing it to its historical volatility, Bank of China is 1.32 times less risky than Bank of Suzhou. It trades about 0.12 of its potential returns per unit of risk. Bank of Suzhou is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 756.00 in Bank of Suzhou on August 30, 2024 and sell it today you would earn a total of 31.00 from holding Bank of Suzhou or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Bank of Suzhou
Performance |
| Timeline |
| Bank of China |
| Bank of Suzhou |
Bank of China and Bank of Suzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Bank of Suzhou
The main advantage of trading using opposite Bank of China and Bank of Suzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Bank of Suzhou 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 Bank of Suzhou will offset losses from the drop in Bank of Suzhou'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 |
| Bank of Suzhou vs. Ming Yang Smart | Bank of Suzhou vs. 159005 | Bank of Suzhou vs. 516220 | Bank of Suzhou vs. Shandong Ruifeng Chemical |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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