Correlation Between Liaoning Chengda and Bank of China
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Bank of China, you can compare the effects of market volatilities on Liaoning Chengda 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 Liaoning Chengda with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Bank of China.
Diversification Opportunities for Liaoning Chengda and Bank of China
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liaoning and Bank is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology 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 Liaoning Chengda 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 Liaoning Chengda Biotechnology 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 Liaoning Chengda i.e., Liaoning Chengda and Bank of China go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Bank of China
Assuming the 90 days trading horizon Liaoning Chengda is expected to generate 4.46 times less return on investment than Bank of China. In addition to that, Liaoning Chengda is 1.4 times more volatile than Bank of China. It trades about 0.01 of its total potential returns per unit of risk. Bank of China is currently generating about 0.07 per unit of volatility. If you would invest 444.00 in Bank of China on November 1, 2024 and sell it today you would earn a total of 101.00 from holding Bank of China or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Bank of China
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Bank of China |
Liaoning Chengda and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Bank of China
The main advantage of trading using opposite Liaoning Chengda and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda 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.| Liaoning Chengda vs. China Petroleum Chemical | Liaoning Chengda vs. PetroChina Co Ltd | Liaoning Chengda vs. China State Construction | Liaoning Chengda vs. China Railway Group |
| Bank of China vs. HaiXin Foods Co | Bank of China vs. Zhongjing Food Co | Bank of China vs. Offshore Oil Engineering | Bank of China vs. Yingde Greatchem Chemicals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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