Correlation Between Bank of China and Beijing Watertek
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By analyzing existing cross correlation between Bank of China and Beijing Watertek Information, you can compare the effects of market volatilities on Bank of China and Beijing Watertek 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 Beijing Watertek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Beijing Watertek.
Diversification Opportunities for Bank of China and Beijing Watertek
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Beijing is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Beijing Watertek Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Watertek Inf 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 Beijing Watertek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Watertek Inf has no effect on the direction of Bank of China i.e., Bank of China and Beijing Watertek go up and down completely randomly.
Pair Corralation between Bank of China and Beijing Watertek
Assuming the 90 days trading horizon Bank of China is expected to generate 3.27 times less return on investment than Beijing Watertek. But when comparing it to its historical volatility, Bank of China is 4.32 times less risky than Beijing Watertek. It trades about 0.15 of its potential returns per unit of risk. Beijing Watertek Information is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Beijing Watertek Information on October 18, 2024 and sell it today you would earn a total of 110.00 from holding Beijing Watertek Information or generate 50.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Beijing Watertek Information
Performance |
| Timeline |
| Bank of China |
| Beijing Watertek Inf |
Bank of China and Beijing Watertek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Beijing Watertek
The main advantage of trading using opposite Bank of China and Beijing Watertek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Beijing Watertek 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 Beijing Watertek will offset losses from the drop in Beijing Watertek's long position.| Bank of China vs. Ningbo Fangzheng Automobile | Bank of China vs. Anhui Xinhua Media | Bank of China vs. Shuhua Sports Co | Bank of China vs. Heilongjiang Publishing Media |
| Beijing Watertek vs. Invengo Information Technology | Beijing Watertek vs. HaiXin Foods Co | Beijing Watertek vs. AVCON Information Tech | Beijing Watertek vs. Fujian Anjoy Foods |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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