Correlation Between Bank of China Limited and Hainan Haiqi
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By analyzing existing cross correlation between Bank of China and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Bank of China Limited and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Hainan Haiqi.
Diversification Opportunities for Bank of China Limited and Hainan Haiqi
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Hainan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Bank of China Limited and Hainan Haiqi
Assuming the 90 days trading horizon Bank of China is expected to under-perform the Hainan Haiqi. But the stock apears to be less risky and, when comparing its historical volatility, Bank of China is 1.51 times less risky than Hainan Haiqi. The stock trades about -0.03 of its potential returns per unit of risk. The Hainan Haiqi Transportation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,757 in Hainan Haiqi Transportation on November 28, 2024 and sell it today you would earn a total of 48.00 from holding Hainan Haiqi Transportation or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Bank of China vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Bank of China Limited |
| Hainan Haiqi Transpo |
Bank of China Limited and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Hainan Haiqi
The main advantage of trading using opposite Bank of China Limited and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi'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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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