Correlation Between Bank of China and Beijing Kingsoft
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By analyzing existing cross correlation between Bank of China and Beijing Kingsoft Office, you can compare the effects of market volatilities on Bank of China and Beijing Kingsoft 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 Beijing Kingsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Beijing Kingsoft.
Diversification Opportunities for Bank of China and Beijing Kingsoft
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Beijing is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Beijing Kingsoft Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kingsoft Office 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 Beijing Kingsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kingsoft Office has no effect on the direction of Bank of China i.e., Bank of China and Beijing Kingsoft go up and down completely randomly.
Pair Corralation between Bank of China and Beijing Kingsoft
Assuming the 90 days trading horizon Bank of China is expected to generate 0.37 times more return on investment than Beijing Kingsoft. However, Bank of China is 2.72 times less risky than Beijing Kingsoft. It trades about 0.44 of its potential returns per unit of risk. Beijing Kingsoft Office is currently generating about 0.0 per unit of risk. If you would invest 504.00 in Bank of China on September 28, 2024 and sell it today you would earn a total of 46.00 from holding Bank of China or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Beijing Kingsoft Office
Performance |
| Timeline |
| Bank of China |
| Beijing Kingsoft Office |
Bank of China and Beijing Kingsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Beijing Kingsoft
The main advantage of trading using opposite Bank of China and Beijing Kingsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Beijing Kingsoft 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 Beijing Kingsoft will offset losses from the drop in Beijing Kingsoft'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 |
| Beijing Kingsoft vs. Industrial and Commercial | Beijing Kingsoft vs. Agricultural Bank of | Beijing Kingsoft vs. China Construction Bank | Beijing Kingsoft 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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