Correlation Between Bank of China and Shenzhen
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By analyzing existing cross correlation between Bank of China and Shenzhen AV Display Co, you can compare the effects of market volatilities on Bank of China and Shenzhen 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 Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Shenzhen.
Diversification Opportunities for Bank of China and Shenzhen
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Shenzhen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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 Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Bank of China i.e., Bank of China and Shenzhen go up and down completely randomly.
Pair Corralation between Bank of China and Shenzhen
Assuming the 90 days trading horizon Bank of China is expected to generate 0.39 times more return on investment than Shenzhen. However, Bank of China is 2.57 times less risky than Shenzhen. It trades about 0.09 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.03 per unit of risk. If you would invest 293.00 in Bank of China on September 14, 2024 and sell it today you would earn a total of 227.00 from holding Bank of China or generate 77.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Bank of China |
| Shenzhen AV Display |
Bank of China and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Shenzhen
The main advantage of trading using opposite Bank of China and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Shenzhen 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 Shenzhen will offset losses from the drop in Shenzhen's long position.| Bank of China vs. Industrial Bank Co | Bank of China vs. GRG Banking Equipment | Bank of China vs. Central Plains Environment | Bank of China vs. Guosheng Financial Holding |
| Shenzhen vs. Changjiang Publishing Media | Shenzhen vs. Shanghai Action Education | Shenzhen vs. Eastern Communications Co | Shenzhen vs. Xinjiang Communications Construction |
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 CEOs Directory module to screen CEOs from public companies around the world.
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