Correlation Between Bank of China and Dirui Industrial
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By analyzing existing cross correlation between Bank of China and Dirui Industrial Co, you can compare the effects of market volatilities on Bank of China and Dirui Industrial 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 Dirui Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Dirui Industrial.
Diversification Opportunities for Bank of China and Dirui Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Dirui is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Dirui Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dirui Industrial 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 Dirui Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dirui Industrial has no effect on the direction of Bank of China i.e., Bank of China and Dirui Industrial go up and down completely randomly.
Pair Corralation between Bank of China and Dirui Industrial
Assuming the 90 days trading horizon Bank of China is expected to generate 0.39 times more return on investment than Dirui Industrial. However, Bank of China is 2.58 times less risky than Dirui Industrial. It trades about 0.13 of its potential returns per unit of risk. Dirui Industrial Co is currently generating about 0.04 per unit of risk. If you would invest 490.00 in Bank of China on August 30, 2024 and sell it today you would earn a total of 14.00 from holding Bank of China or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Dirui Industrial Co
Performance |
| Timeline |
| Bank of China |
| Dirui Industrial |
Bank of China and Dirui Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Dirui Industrial
The main advantage of trading using opposite Bank of China and Dirui Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Dirui Industrial 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 Dirui Industrial will offset losses from the drop in Dirui Industrial's long position.| Bank of China vs. Dhc Software Co | Bank of China vs. Jinyu Bio Technology Co | Bank of China vs. BTG Hotels Group | Bank of China vs. Linewell Software Co |
| Dirui Industrial vs. Industrial and Commercial | Dirui Industrial vs. China Construction Bank | Dirui Industrial vs. Agricultural Bank of | Dirui Industrial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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