Correlation Between Bank of China Limited and Shandong Publishing
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By analyzing existing cross correlation between Bank of China and Shandong Publishing Media, you can compare the effects of market volatilities on Bank of China Limited and Shandong Publishing 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 Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Shandong Publishing.
Diversification Opportunities for Bank of China Limited and Shandong Publishing
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Shandong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Shandong Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Publishing Media 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 Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Publishing Media has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Shandong Publishing go up and down completely randomly.
Pair Corralation between Bank of China Limited and Shandong Publishing
Assuming the 90 days trading horizon Bank of China is expected to generate 0.83 times more return on investment than Shandong Publishing. However, Bank of China is 1.2 times less risky than Shandong Publishing. It trades about -0.04 of its potential returns per unit of risk. Shandong Publishing Media is currently generating about -0.26 per unit of risk. If you would invest 545.00 in Bank of China on November 27, 2024 and sell it today you would lose (4.00) from holding Bank of China or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Shandong Publishing Media
Performance |
| Timeline |
| Bank of China Limited |
| Shandong Publishing Media |
Bank of China Limited and Shandong Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Shandong Publishing
The main advantage of trading using opposite Bank of China Limited and Shandong Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Shandong Publishing 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 Publishing will offset losses from the drop in Shandong Publishing's long position.| Bank of China Limited vs. China World Trade | Bank of China Limited vs. Henan Shuanghui Investment | Bank of China Limited vs. Huawen Media Investment | Bank of China Limited vs. Zhongrun Resources Investment |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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