Correlation Between Bank of China and UE Furniture
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By analyzing existing cross correlation between Bank of China and UE Furniture Co, you can compare the effects of market volatilities on Bank of China and UE Furniture 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 UE Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and UE Furniture.
Diversification Opportunities for Bank of China and UE Furniture
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and 603600 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and UE Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UE Furniture 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 UE Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UE Furniture has no effect on the direction of Bank of China i.e., Bank of China and UE Furniture go up and down completely randomly.
Pair Corralation between Bank of China and UE Furniture
Assuming the 90 days trading horizon Bank of China is expected to generate 1.19 times less return on investment than UE Furniture. But when comparing it to its historical volatility, Bank of China is 2.24 times less risky than UE Furniture. It trades about 0.14 of its potential returns per unit of risk. UE Furniture Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,199 in UE Furniture Co on November 3, 2024 and sell it today you would earn a total of 86.00 from holding UE Furniture Co or generate 7.17% 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. UE Furniture Co
Performance |
| Timeline |
| Bank of China |
| UE Furniture |
Bank of China and UE Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and UE Furniture
The main advantage of trading using opposite Bank of China and UE Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, UE Furniture 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 UE Furniture will offset losses from the drop in UE Furniture's long position.| Bank of China vs. Zoje Resources Investment | Bank of China vs. Chengdu Xingrong Investment | Bank of China vs. Zbit Semiconductor A | Bank of China vs. Southchip Semiconductor Technology |
| UE Furniture vs. Fujian Longzhou Transportation | UE Furniture vs. Xinjiang Beixin RoadBridge | UE Furniture vs. Masterwork Machinery | UE Furniture vs. Sichuan Fulin Transportation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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