Correlation Between BOC Hong and United Security
Can any of the company-specific risk be diversified away by investing in both BOC Hong and United Security at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BOC Hong and United Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and United Security Bancshares, you can compare the effects of market volatilities on BOC Hong and United Security 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 BOC Hong with a short position of United Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and United Security.
Diversification Opportunities for BOC Hong and United Security
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOC and United is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and United Security Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Security Banc and BOC Hong 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 BOC Hong Kong are associated (or correlated) with United Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Security Banc has no effect on the direction of BOC Hong i.e., BOC Hong and United Security go up and down completely randomly.
Pair Corralation between BOC Hong and United Security
Assuming the 90 days horizon BOC Hong is expected to generate 12.71 times less return on investment than United Security. In addition to that, BOC Hong is 1.24 times more volatile than United Security Bancshares. It trades about 0.02 of its total potential returns per unit of risk. United Security Bancshares is currently generating about 0.38 per unit of volatility. If you would invest 887.00 in United Security Bancshares on August 28, 2024 and sell it today you would earn a total of 83.00 from holding United Security Bancshares or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BOC Hong Kong vs. United Security Bancshares
Performance |
| Timeline |
| BOC Hong Kong |
| United Security Banc |
BOC Hong and United Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and United Security
The main advantage of trading using opposite BOC Hong and United Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong position performs unexpectedly, United Security 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 United Security will offset losses from the drop in United Security's long position.| BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
| United Security vs. Home Federal Bancorp | United Security vs. Lake Shore Bancorp | United Security vs. Community West Bancshares | United Security vs. First Northwest Bancorp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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