Correlation Between Bank of China and Anhui Transport
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By analyzing existing cross correlation between Bank of China and Anhui Transport Consulting, you can compare the effects of market volatilities on Bank of China and Anhui Transport 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 Anhui Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Anhui Transport.
Diversification Opportunities for Bank of China and Anhui Transport
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Anhui is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Anhui Transport Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Transport Cons 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 Anhui Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Transport Cons has no effect on the direction of Bank of China i.e., Bank of China and Anhui Transport go up and down completely randomly.
Pair Corralation between Bank of China and Anhui Transport
Assuming the 90 days trading horizon Bank of China is expected to generate 0.6 times more return on investment than Anhui Transport. However, Bank of China is 1.67 times less risky than Anhui Transport. It trades about 0.08 of its potential returns per unit of risk. Anhui Transport Consulting is currently generating about 0.01 per unit of risk. If you would invest 444.00 in Bank of China on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Bank of China or generate 13.51% 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. Anhui Transport Consulting
Performance |
| Timeline |
| Bank of China |
| Anhui Transport Cons |
Bank of China and Anhui Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Anhui Transport
The main advantage of trading using opposite Bank of China and Anhui Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Anhui Transport 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 Anhui Transport will offset losses from the drop in Anhui Transport's long position.| Bank of China vs. Dhc Software Co | Bank of China vs. Jinyu Bio Technology Co | Bank of China vs. BTG Hotels Group | Bank of China vs. Linewell Software Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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