Correlation Between Bank of China and Beijing Wandong
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By analyzing existing cross correlation between Bank of China and Beijing Wandong Medical, you can compare the effects of market volatilities on Bank of China and Beijing Wandong 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 Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Beijing Wandong.
Diversification Opportunities for Bank of China and Beijing Wandong
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Beijing is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical 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 Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Bank of China i.e., Bank of China and Beijing Wandong go up and down completely randomly.
Pair Corralation between Bank of China and Beijing Wandong
Assuming the 90 days trading horizon Bank of China is expected to generate 186.07 times less return on investment than Beijing Wandong. But when comparing it to its historical volatility, Bank of China is 3.38 times less risky than Beijing Wandong. It trades about 0.0 of its potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,429 in Beijing Wandong Medical on August 26, 2024 and sell it today you would earn a total of 243.00 from holding Beijing Wandong Medical or generate 17.0% 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. Beijing Wandong Medical
Performance |
| Timeline |
| Bank of China |
| Beijing Wandong Medical |
Bank of China and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Beijing Wandong
The main advantage of trading using opposite Bank of China and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Beijing Wandong 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 Wandong will offset losses from the drop in Beijing Wandong's long position.| Bank of China vs. Sinofibers Technology Co | Bank of China vs. Beijing Kaiwen Education | Bank of China vs. HanS Laser Tech | Bank of China vs. Tianshui Huatian Technology |
| Beijing Wandong vs. Bank of China | Beijing Wandong vs. Kweichow Moutai Co | Beijing Wandong vs. PetroChina Co Ltd | Beijing Wandong 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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