Correlation Between Bank of China and Zhengping RoadBridge
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By analyzing existing cross correlation between Bank of China and Zhengping RoadBridge Constr, you can compare the effects of market volatilities on Bank of China and Zhengping RoadBridge 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 Zhengping RoadBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Zhengping RoadBridge.
Diversification Opportunities for Bank of China and Zhengping RoadBridge
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Zhengping is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Zhengping RoadBridge Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengping RoadBridge 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 Zhengping RoadBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengping RoadBridge has no effect on the direction of Bank of China i.e., Bank of China and Zhengping RoadBridge go up and down completely randomly.
Pair Corralation between Bank of China and Zhengping RoadBridge
Assuming the 90 days trading horizon Bank of China is expected to generate 4.42 times less return on investment than Zhengping RoadBridge. But when comparing it to its historical volatility, Bank of China is 2.9 times less risky than Zhengping RoadBridge. It trades about 0.13 of its potential returns per unit of risk. Zhengping RoadBridge Constr is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Zhengping RoadBridge Constr on September 12, 2024 and sell it today you would earn a total of 129.00 from holding Zhengping RoadBridge Constr or generate 52.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Bank of China vs. Zhengping RoadBridge Constr
Performance |
| Timeline |
| Bank of China |
| Zhengping RoadBridge |
Bank of China and Zhengping RoadBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Zhengping RoadBridge
The main advantage of trading using opposite Bank of China and Zhengping RoadBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Zhengping RoadBridge 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 Zhengping RoadBridge will offset losses from the drop in Zhengping RoadBridge's long position.| Bank of China vs. AUPU Home Style | Bank of China vs. HaiXin Foods Co | Bank of China vs. JuneYao Dairy Co | Bank of China vs. Zhengzhou Qianweiyangchu Food |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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