Correlation Between Bank of China and Sichuan Teway
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By analyzing existing cross correlation between Bank of China and Sichuan Teway Food, you can compare the effects of market volatilities on Bank of China and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Sichuan Teway.
Diversification Opportunities for Bank of China and Sichuan Teway
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Sichuan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of Bank of China i.e., Bank of China and Sichuan Teway go up and down completely randomly.
Pair Corralation between Bank of China and Sichuan Teway
Assuming the 90 days trading horizon Bank of China is expected to generate 0.53 times more return on investment than Sichuan Teway. However, Bank of China is 1.87 times less risky than Sichuan Teway. It trades about 0.07 of its potential returns per unit of risk. Sichuan Teway Food is currently generating about 0.02 per unit of risk. If you would invest 444.00 in Bank of China on September 2, 2024 and sell it today you would earn a total of 57.00 from holding Bank of China or generate 12.84% 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. Sichuan Teway Food
Performance |
| Timeline |
| Bank of China |
| Sichuan Teway Food |
Bank of China and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Sichuan Teway
The main advantage of trading using opposite Bank of China and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway's long position.| Bank of China vs. Marssenger Kitchenware Co | Bank of China vs. Thinkingdom Media Group | Bank of China vs. Hengdian Entertainment Co | Bank of China vs. Lander Sports Development |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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