Correlation Between Bank of China and Huizhou Speed
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By analyzing existing cross correlation between Bank of China and Huizhou Speed Wireless, you can compare the effects of market volatilities on Bank of China and Huizhou Speed 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 Huizhou Speed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Huizhou Speed.
Diversification Opportunities for Bank of China and Huizhou Speed
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Huizhou is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Huizhou Speed Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huizhou Speed Wireless 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 Huizhou Speed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huizhou Speed Wireless has no effect on the direction of Bank of China i.e., Bank of China and Huizhou Speed go up and down completely randomly.
Pair Corralation between Bank of China and Huizhou Speed
Assuming the 90 days trading horizon Bank of China is expected to generate 0.32 times more return on investment than Huizhou Speed. However, Bank of China is 3.15 times less risky than Huizhou Speed. It trades about 0.44 of its potential returns per unit of risk. Huizhou Speed Wireless is currently generating about -0.12 per unit of risk. If you would invest 504.00 in Bank of China on September 28, 2024 and sell it today you would earn a total of 46.00 from holding Bank of China or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Huizhou Speed Wireless
Performance |
| Timeline |
| Bank of China |
| Huizhou Speed Wireless |
Bank of China and Huizhou Speed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Huizhou Speed
The main advantage of trading using opposite Bank of China and Huizhou Speed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Huizhou Speed 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 Huizhou Speed will offset losses from the drop in Huizhou Speed's long position.| Bank of China vs. Industrial and Commercial | Bank of China vs. Kweichow Moutai Co | Bank of China vs. Agricultural Bank of | Bank of China vs. China Mobile Limited |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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