Correlation Between Bank of China and Shengyuan Environmental
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By analyzing existing cross correlation between Bank of China and Shengyuan Environmental Protection, you can compare the effects of market volatilities on Bank of China and Shengyuan Environmental 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 Shengyuan Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shengyuan Environmental.
Diversification Opportunities for Bank of China and Shengyuan Environmental
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Shengyuan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shengyuan Environmental Protec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengyuan Environmental 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 Shengyuan Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengyuan Environmental has no effect on the direction of Bank of China i.e., Bank of China and Shengyuan Environmental go up and down completely randomly.
Pair Corralation between Bank of China and Shengyuan Environmental
Assuming the 90 days trading horizon Bank of China is expected to generate 2.8 times less return on investment than Shengyuan Environmental. But when comparing it to its historical volatility, Bank of China is 2.37 times less risky than Shengyuan Environmental. It trades about 0.14 of its potential returns per unit of risk. Shengyuan Environmental Protection is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,330 in Shengyuan Environmental Protection on September 2, 2024 and sell it today you would earn a total of 98.00 from holding Shengyuan Environmental Protection or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shengyuan Environmental Protec
Performance |
| Timeline |
| Bank of China |
| Shengyuan Environmental |
Bank of China and Shengyuan Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shengyuan Environmental
The main advantage of trading using opposite Bank of China and Shengyuan Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shengyuan Environmental 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 Shengyuan Environmental will offset losses from the drop in Shengyuan Environmental's long position.| Bank of China vs. Marssenger Kitchenware Co | Bank of China vs. Thinkingdom Media Group | Bank of China vs. Hengdian Entertainment Co | Bank of China vs. Lander Sports Development |
| Shengyuan Environmental vs. Bank of China | Shengyuan Environmental vs. Kweichow Moutai Co | Shengyuan Environmental vs. PetroChina Co Ltd | Shengyuan Environmental vs. Bank of Communications |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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