Correlation Between Bank of China and Metro Investment
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By analyzing existing cross correlation between Bank of China and Metro Investment Development, you can compare the effects of market volatilities on Bank of China and Metro Investment 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 Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Metro Investment.
Diversification Opportunities for Bank of China and Metro Investment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Metro is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Bank of China i.e., Bank of China and Metro Investment go up and down completely randomly.
Pair Corralation between Bank of China and Metro Investment
Assuming the 90 days trading horizon Bank of China is expected to generate 0.36 times more return on investment than Metro Investment. However, Bank of China is 2.75 times less risky than Metro Investment. It trades about 0.19 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.02 per unit of risk. If you would invest 482.00 in Bank of China on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Bank of China or generate 3.94% 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. Metro Investment Development
Performance |
| Timeline |
| Bank of China |
| Metro Investment Dev |
Bank of China and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Metro Investment
The main advantage of trading using opposite Bank of China and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Metro Investment 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 Metro Investment will offset losses from the drop in Metro Investment's long position.| Bank of China vs. China Minmetals Rare | Bank of China vs. China Eastern Airlines | Bank of China vs. Metro Investment Development | Bank of China vs. Cultural Investment Holdings |
| Metro Investment vs. BeiGene | Metro Investment vs. Kweichow Moutai Co | Metro Investment vs. Beijing Roborock Technology | Metro Investment vs. G bits Network Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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