Correlation Between Bank of China and Changchun Faway
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By analyzing existing cross correlation between Bank of China and Changchun Faway Automobile, you can compare the effects of market volatilities on Bank of China and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Changchun Faway.
Diversification Opportunities for Bank of China and Changchun Faway
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Changchun is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Bank of China i.e., Bank of China and Changchun Faway go up and down completely randomly.
Pair Corralation between Bank of China and Changchun Faway
Assuming the 90 days trading horizon Bank of China is expected to generate 0.66 times more return on investment than Changchun Faway. However, Bank of China is 1.51 times less risky than Changchun Faway. It trades about 0.17 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about -0.16 per unit of risk. If you would invest 523.00 in Bank of China on October 20, 2024 and sell it today you would earn a total of 22.00 from holding Bank of China or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Changchun Faway Automobile
Performance |
| Timeline |
| Bank of China |
| Changchun Faway Auto |
Bank of China and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Changchun Faway
The main advantage of trading using opposite Bank of China and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Bank of China vs. Shaanxi Construction Machinery | Bank of China vs. Digital China Information | Bank of China vs. Longmaster Information Tech | Bank of China vs. Ningbo Construction Co |
| Changchun Faway vs. Industrial and Commercial | Changchun Faway vs. Agricultural Bank of | Changchun Faway vs. China Construction Bank | Changchun Faway vs. Bank of China |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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