Correlation Between Yantai North and Bank of China
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By analyzing existing cross correlation between Yantai North Andre and Bank of China, you can compare the effects of market volatilities on Yantai North 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 Yantai North with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yantai North and Bank of China.
Diversification Opportunities for Yantai North and Bank of China
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yantai and Bank is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yantai North Andre 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 Yantai North 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 Yantai North Andre 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 Yantai North i.e., Yantai North and Bank of China go up and down completely randomly.
Pair Corralation between Yantai North and Bank of China
Assuming the 90 days trading horizon Yantai North Andre is expected to generate 2.12 times more return on investment than Bank of China. However, Yantai North is 2.12 times more volatile than Bank of China. It trades about 0.15 of its potential returns per unit of risk. Bank of China is currently generating about 0.03 per unit of risk. If you would invest 2,115 in Yantai North Andre on August 29, 2024 and sell it today you would earn a total of 654.00 from holding Yantai North Andre or generate 30.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yantai North Andre vs. Bank of China
Performance |
| Timeline |
| Yantai North Andre |
| Bank of China |
Yantai North and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yantai North and Bank of China
The main advantage of trading using opposite Yantai North and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yantai North 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.| Yantai North vs. Mengtian Home Group | Yantai North vs. Xinjiang Tianrun Dairy | Yantai North vs. Guilin Seamild Foods | Yantai North vs. Nanxing Furniture Machinery |
| Bank of China vs. Dhc Software Co | Bank of China vs. Jinyu Bio Technology Co | Bank of China vs. BTG Hotels Group | Bank of China vs. Linewell Software 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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