Correlation Between Linewell Software and Bank of China
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By analyzing existing cross correlation between Linewell Software Co and Bank of China, you can compare the effects of market volatilities on Linewell Software and Bank of China 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 Linewell Software with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linewell Software and Bank of China.
Diversification Opportunities for Linewell Software and Bank of China
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Linewell and Bank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Linewell Software Co and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China and Linewell Software 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 Linewell Software Co are associated (or correlated) with Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Linewell Software i.e., Linewell Software and Bank of China go up and down completely randomly.
Pair Corralation between Linewell Software and Bank of China
Assuming the 90 days trading horizon Linewell Software Co is expected to generate 4.07 times more return on investment than Bank of China. However, Linewell Software is 4.07 times more volatile than Bank of China. It trades about 0.03 of its potential returns per unit of risk. Bank of China is currently generating about 0.11 per unit of risk. If you would invest 1,135 in Linewell Software Co on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Linewell Software Co or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linewell Software Co vs. Bank of China
Performance |
| Timeline |
| Linewell Software |
| Bank of China |
Linewell Software and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linewell Software and Bank of China
The main advantage of trading using opposite Linewell Software and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linewell Software position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China's long position.| Linewell Software vs. Agricultural Bank of | Linewell Software vs. Industrial and Commercial | Linewell Software vs. Bank of China | Linewell Software vs. PetroChina Co Ltd |
| Bank of China vs. Zhengzhou Qianweiyangchu Food | Bank of China vs. Guangdong Advertising Co | Bank of China vs. Linewell Software Co | Bank of China vs. Juewei Food Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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