Correlation Between FLOW TRADERS and BANK OCHINA
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and BANK OCHINA 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 FLOW TRADERS and BANK OCHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and BANK OCHINA H, you can compare the effects of market volatilities on FLOW TRADERS and BANK OCHINA 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 FLOW TRADERS with a short position of BANK OCHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and BANK OCHINA.
Diversification Opportunities for FLOW TRADERS and BANK OCHINA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FLOW and BANK is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and BANK OCHINA H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OCHINA H and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with BANK OCHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OCHINA H has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and BANK OCHINA go up and down completely randomly.
Pair Corralation between FLOW TRADERS and BANK OCHINA
Assuming the 90 days horizon FLOW TRADERS is expected to generate 5.31 times less return on investment than BANK OCHINA. But when comparing it to its historical volatility, FLOW TRADERS LTD is 1.15 times less risky than BANK OCHINA. It trades about 0.01 of its potential returns per unit of risk. BANK OCHINA H is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 668.00 in BANK OCHINA H on September 13, 2024 and sell it today you would earn a total of 472.00 from holding BANK OCHINA H or generate 70.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. BANK OCHINA H
Performance |
| Timeline |
| FLOW TRADERS LTD |
| BANK OCHINA H |
FLOW TRADERS and BANK OCHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and BANK OCHINA
The main advantage of trading using opposite FLOW TRADERS and BANK OCHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, BANK OCHINA 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 OCHINA will offset losses from the drop in BANK OCHINA's long position.| FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. SIVERS SEMICONDUCTORS AB | FLOW TRADERS vs. CHINA HUARONG ENERHD 50 | FLOW TRADERS vs. NORDIC HALIBUT AS |
| BANK OCHINA vs. NORWEGIAN AIR SHUT | BANK OCHINA vs. CarsalesCom | BANK OCHINA vs. FAST RETAIL ADR | BANK OCHINA vs. FLOW TRADERS LTD |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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