Correlation Between Bollor SE and China Communications
Can any of the company-specific risk be diversified away by investing in both Bollor SE and China Communications 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 Bollor SE and China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bollor SE and China Communications Services, you can compare the effects of market volatilities on Bollor SE and China 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 Bollor SE with a short position of China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bollor SE and China Communications.
Diversification Opportunities for Bollor SE and China Communications
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bollor and China is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bollor SE and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications and Bollor SE 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 Bollor SE are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of Bollor SE i.e., Bollor SE and China Communications go up and down completely randomly.
Pair Corralation between Bollor SE and China Communications
Assuming the 90 days horizon Bollor SE is expected to generate 13.9 times less return on investment than China Communications. But when comparing it to its historical volatility, Bollor SE is 4.94 times less risky than China Communications. It trades about 0.03 of its potential returns per unit of risk. China Communications Services is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.22 in China Communications Services on August 30, 2024 and sell it today you would earn a total of 39.78 from holding China Communications Services or generate 483.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bollor SE vs. China Communications Services
Performance |
| Timeline |
| Bollor SE |
| China Communications |
Bollor SE and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bollor SE and China Communications
The main advantage of trading using opposite Bollor SE and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bollor SE position performs unexpectedly, China 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 China Communications will offset losses from the drop in China Communications' long position.| Bollor SE vs. ZTO Express | Bollor SE vs. Expeditors International of | Bollor SE vs. Superior Plus Corp | Bollor SE vs. Origin Agritech |
| China Communications vs. Verizon Communications | China Communications vs. ATT Inc | China Communications vs. ATT Inc | China Communications vs. Deutsche Telekom AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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