Correlation Between Changchun BCHT and Bank of Communications
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Bank of Communications, you can compare the effects of market volatilities on Changchun BCHT and Bank of Communications 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 Changchun BCHT with a short position of Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Bank of Communications.
Diversification Opportunities for Changchun BCHT and Bank of Communications
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Changchun and Bank is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with Bank of Communications. 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 Communications has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Bank of Communications go up and down completely randomly.
Pair Corralation between Changchun BCHT and Bank of Communications
Assuming the 90 days trading horizon Changchun BCHT Biotechnology is expected to under-perform the Bank of Communications. In addition to that, Changchun BCHT is 1.36 times more volatile than Bank of Communications. It trades about -0.37 of its total potential returns per unit of risk. Bank of Communications is currently generating about -0.04 per unit of volatility. If you would invest 750.00 in Bank of Communications on October 11, 2024 and sell it today you would lose (10.00) from holding Bank of Communications or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Bank of Communications
Performance |
| Timeline |
| Changchun BCHT Biote |
| Bank of Communications |
Changchun BCHT and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Bank of Communications
The main advantage of trading using opposite Changchun BCHT and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Bank of Communications 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 Communications will offset losses from the drop in Bank of Communications' long position.| Changchun BCHT vs. Industrial Bank Co | Changchun BCHT vs. Shenwu Energy Saving | Changchun BCHT vs. Agricultural Bank of | Changchun BCHT vs. Hua Xia Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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