Correlation Between Bank of China and Guangzhou Fangbang
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By analyzing existing cross correlation between Bank of China and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on Bank of China and Guangzhou Fangbang 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 Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Guangzhou Fangbang.
Diversification Opportunities for Bank of China and Guangzhou Fangbang
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Guangzhou is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang 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 Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of Bank of China i.e., Bank of China and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between Bank of China and Guangzhou Fangbang
Assuming the 90 days trading horizon Bank of China is expected to generate 0.46 times more return on investment than Guangzhou Fangbang. However, Bank of China is 2.19 times less risky than Guangzhou Fangbang. It trades about 0.5 of its potential returns per unit of risk. Guangzhou Fangbang Electronics is currently generating about 0.02 per unit of risk. If you would invest 499.00 in Bank of China on September 27, 2024 and sell it today you would earn a total of 52.00 from holding Bank of China or generate 10.42% 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. Guangzhou Fangbang Electronics
Performance |
| Timeline |
| Bank of China |
| Guangzhou Fangbang |
Bank of China and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Guangzhou Fangbang
The main advantage of trading using opposite Bank of China and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Guangzhou Fangbang 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 Guangzhou Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.| Bank of China vs. Industrial and Commercial | Bank of China vs. Kweichow Moutai Co | Bank of China vs. Agricultural Bank of | Bank of China vs. China Mobile Limited |
| Guangzhou Fangbang vs. Industrial and Commercial | Guangzhou Fangbang vs. China Construction Bank | Guangzhou Fangbang vs. Agricultural Bank of | Guangzhou Fangbang vs. Bank of China |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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