Correlation Between Bank of China Limited and Shandong Homey
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By analyzing existing cross correlation between Bank of China and Shandong Homey Aquatic, you can compare the effects of market volatilities on Bank of China Limited and Shandong Homey 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 Limited with a short position of Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Shandong Homey.
Diversification Opportunities for Bank of China Limited and Shandong Homey
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Shandong is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic and Bank of China Limited 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Shandong Homey go up and down completely randomly.
Pair Corralation between Bank of China Limited and Shandong Homey
Assuming the 90 days trading horizon Bank of China is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, Bank of China is 1.79 times less risky than Shandong Homey. The stock trades about -0.03 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Shandong Homey Aquatic on November 28, 2024 and sell it today you would earn a total of 7.00 from holding Shandong Homey Aquatic or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Bank of China vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Bank of China Limited |
| Shandong Homey Aquatic |
Bank of China Limited and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Shandong Homey
The main advantage of trading using opposite Bank of China Limited and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| Bank of China Limited vs. Chongqing Sulian Plastic | Bank of China Limited vs. Beijing Jiaman Dress | Bank of China Limited vs. Miracll Chemicals Co | Bank of China Limited vs. Wankai New Materials |
| Shandong Homey vs. CICT Mobile Communication | Shandong Homey vs. Allwin Telecommunication Co | Shandong Homey vs. Zhejiang Yongjin Metal | Shandong Homey vs. Western Metal Materials |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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