Correlation Between Bank of China and Beijing Tongyizhong
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By analyzing existing cross correlation between Bank of China and Beijing Tongyizhong New, you can compare the effects of market volatilities on Bank of China and Beijing Tongyizhong 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 Tongyizhong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Beijing Tongyizhong.
Diversification Opportunities for Bank of China and Beijing Tongyizhong
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Beijing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Beijing Tongyizhong New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Tongyizhong New 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 Tongyizhong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Tongyizhong New has no effect on the direction of Bank of China i.e., Bank of China and Beijing Tongyizhong go up and down completely randomly.
Pair Corralation between Bank of China and Beijing Tongyizhong
Assuming the 90 days trading horizon Bank of China is expected to generate 0.49 times more return on investment than Beijing Tongyizhong. However, Bank of China is 2.06 times less risky than Beijing Tongyizhong. It trades about 0.09 of its potential returns per unit of risk. Beijing Tongyizhong New is currently generating about 0.01 per unit of risk. If you would invest 397.00 in Bank of China on September 14, 2024 and sell it today you would earn a total of 123.00 from holding Bank of China or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Beijing Tongyizhong New
Performance |
| Timeline |
| Bank of China |
| Beijing Tongyizhong New |
Bank of China and Beijing Tongyizhong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Beijing Tongyizhong
The main advantage of trading using opposite Bank of China and Beijing Tongyizhong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Beijing Tongyizhong 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 Tongyizhong will offset losses from the drop in Beijing Tongyizhong's long position.| Bank of China vs. Industrial Bank Co | Bank of China vs. GRG Banking Equipment | Bank of China vs. Central Plains Environment | Bank of China vs. Guosheng Financial Holding |
| Beijing Tongyizhong vs. Anhui Deli Household | Beijing Tongyizhong vs. Hainan Haiqi Transportation | Beijing Tongyizhong vs. Chongqing Changan Automobile | Beijing Tongyizhong vs. Yindu Kitchen Equipment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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