Correlation Between Bank of China and Wenzhou Hongfeng
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By analyzing existing cross correlation between Bank of China and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Bank of China and Wenzhou Hongfeng 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 Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Wenzhou Hongfeng.
Diversification Opportunities for Bank of China and Wenzhou Hongfeng
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Wenzhou is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele 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 Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Bank of China i.e., Bank of China and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Bank of China and Wenzhou Hongfeng
Assuming the 90 days trading horizon Bank of China is expected to generate 0.35 times more return on investment than Wenzhou Hongfeng. However, Bank of China is 2.89 times less risky than Wenzhou Hongfeng. It trades about 0.35 of its potential returns per unit of risk. Wenzhou Hongfeng Electrical is currently generating about 0.03 per unit of risk. If you would invest 482.00 in Bank of China on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Bank of China or generate 7.88% 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. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Bank of China |
| Wenzhou Hongfeng Ele |
Bank of China and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Wenzhou Hongfeng
The main advantage of trading using opposite Bank of China and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| Bank of China vs. Industrial Bank Co | Bank of China vs. GRG Banking Equipment | Bank of China vs. Central Plains Environment | Bank of China vs. Guosheng Financial Holding |
| Wenzhou Hongfeng vs. Industrial and Commercial | Wenzhou Hongfeng vs. Agricultural Bank of | Wenzhou Hongfeng vs. China Construction Bank | Wenzhou Hongfeng 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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