Correlation Between Bank of China and Beken Corp
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By analyzing existing cross correlation between Bank of China and Beken Corp, you can compare the effects of market volatilities on Bank of China and Beken Corp 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 Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Beken Corp.
Diversification Opportunities for Bank of China and Beken Corp
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Beken is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp 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 Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of Bank of China i.e., Bank of China and Beken Corp go up and down completely randomly.
Pair Corralation between Bank of China and Beken Corp
Assuming the 90 days trading horizon Bank of China is expected to generate 6.5 times less return on investment than Beken Corp. But when comparing it to its historical volatility, Bank of China is 4.3 times less risky than Beken Corp. It trades about 0.09 of its potential returns per unit of risk. Beken Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,382 in Beken Corp on October 14, 2024 and sell it today you would earn a total of 962.00 from holding Beken Corp or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Beken Corp
Performance |
| Timeline |
| Bank of China |
| Beken Corp |
Bank of China and Beken Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Beken Corp
The main advantage of trading using opposite Bank of China and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.| Bank of China vs. XinJiang GuoTong Pipeline | Bank of China vs. Guangzhou Haozhi Industrial | Bank of China vs. Hengli Industrial Development | Bank of China vs. Pengxin International Mining |
| Beken Corp vs. Biwin Storage Technology | Beken Corp vs. PetroChina Co Ltd | Beken Corp vs. Industrial and Commercial | Beken Corp vs. China Construction Bank |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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