Correlation Between Bank of China and Strait Innovation
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By analyzing existing cross correlation between Bank of China and Strait Innovation Internet, you can compare the effects of market volatilities on Bank of China and Strait Innovation 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 Strait Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Strait Innovation.
Diversification Opportunities for Bank of China and Strait Innovation
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Strait is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Strait Innovation Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strait Innovation 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 Strait Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strait Innovation has no effect on the direction of Bank of China i.e., Bank of China and Strait Innovation go up and down completely randomly.
Pair Corralation between Bank of China and Strait Innovation
Assuming the 90 days trading horizon Bank of China is expected to generate 0.32 times more return on investment than Strait Innovation. However, Bank of China is 3.17 times less risky than Strait Innovation. It trades about -0.09 of its potential returns per unit of risk. Strait Innovation Internet is currently generating about -0.09 per unit of risk. If you would invest 543.00 in Bank of China on October 25, 2024 and sell it today you would lose (12.00) from holding Bank of China or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Strait Innovation Internet
Performance |
| Timeline |
| Bank of China |
| Strait Innovation |
Bank of China and Strait Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Strait Innovation
The main advantage of trading using opposite Bank of China and Strait Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Strait Innovation 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 Strait Innovation will offset losses from the drop in Strait Innovation's long position.| Bank of China vs. Guangdong Jingyi Metal | Bank of China vs. Ziel Home Furnishing | Bank of China vs. Vohringer Home Technology | Bank of China vs. CITIC Metal Co |
| Strait Innovation vs. Kweichow Moutai Co | Strait Innovation vs. NAURA Technology Group | Strait Innovation vs. APT Medical | Strait Innovation vs. BYD Co Ltd |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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