Correlation Between Hang Seng and Bank of Botetourt
Can any of the company-specific risk be diversified away by investing in both Hang Seng and Bank of Botetourt 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 Hang Seng and Bank of Botetourt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Seng Bank and Bank of Botetourt, you can compare the effects of market volatilities on Hang Seng and Bank of Botetourt 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 Hang Seng with a short position of Bank of Botetourt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Seng and Bank of Botetourt.
Diversification Opportunities for Hang Seng and Bank of Botetourt
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hang and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng Bank and Bank of Botetourt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Botetourt and Hang Seng 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 Hang Seng Bank are associated (or correlated) with Bank of Botetourt. 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 Botetourt has no effect on the direction of Hang Seng i.e., Hang Seng and Bank of Botetourt go up and down completely randomly.
Pair Corralation between Hang Seng and Bank of Botetourt
Assuming the 90 days horizon Hang Seng Bank is expected to generate 8.43 times more return on investment than Bank of Botetourt. However, Hang Seng is 8.43 times more volatile than Bank of Botetourt. It trades about 0.16 of its potential returns per unit of risk. Bank of Botetourt is currently generating about 0.1 per unit of risk. If you would invest 1,200 in Hang Seng Bank on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Hang Seng Bank or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hang Seng Bank vs. Bank of Botetourt
Performance |
| Timeline |
| Hang Seng Bank |
| Bank of Botetourt |
Hang Seng and Bank of Botetourt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Seng and Bank of Botetourt
The main advantage of trading using opposite Hang Seng and Bank of Botetourt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Seng position performs unexpectedly, Bank of Botetourt 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 Botetourt will offset losses from the drop in Bank of Botetourt's long position.| Hang Seng vs. Caixabank SA ADR | Hang Seng vs. Commercial International Bank | Hang Seng vs. PT Bank Rakyat | Hang Seng vs. Riverview Bancorp |
| Bank of Botetourt vs. Century Financial Corp | Bank of Botetourt vs. FS Bancorp | Bank of Botetourt vs. Lyons Bancorp | Bank of Botetourt vs. Solvay Bank Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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