Correlation Between Bank of China and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Bank of China and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Bank of China and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Guangzhou Ruoyuchen.
Diversification Opportunities for Bank of China and Guangzhou Ruoyuchen
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Guangzhou is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Bank of China i.e., Bank of China and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Bank of China and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Bank of China is expected to generate 15.38 times less return on investment than Guangzhou Ruoyuchen. But when comparing it to its historical volatility, Bank of China is 4.77 times less risky than Guangzhou Ruoyuchen. It trades about 0.11 of its potential returns per unit of risk. Guangzhou Ruoyuchen Information is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Guangzhou Ruoyuchen Information on August 29, 2024 and sell it today you would earn a total of 590.00 from holding Guangzhou Ruoyuchen Information or generate 39.6% 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. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Bank of China |
| Guangzhou Ruoyuchen |
Bank of China and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Guangzhou Ruoyuchen
The main advantage of trading using opposite Bank of China and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| Bank of China vs. Zhengzhou Qianweiyangchu Food | Bank of China vs. Guangdong Advertising Co | Bank of China vs. Linewell Software Co | Bank of China vs. Juewei Food Co |
| Guangzhou Ruoyuchen vs. Industrial and Commercial | Guangzhou Ruoyuchen vs. Agricultural Bank of | Guangzhou Ruoyuchen vs. China Construction Bank | Guangzhou Ruoyuchen vs. Bank of China |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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