Correlation Between SERI INDUSTRIAL and Bank of China
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Bank of China 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 SERI INDUSTRIAL and Bank of China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Bank of China, you can compare the effects of market volatilities on SERI INDUSTRIAL 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 SERI INDUSTRIAL with a short position of Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Bank of China.
Diversification Opportunities for SERI INDUSTRIAL and Bank of China
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SERI and Bank is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO 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 SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Bank of China go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Bank of China
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the Bank of China. In addition to that, SERI INDUSTRIAL is 1.78 times more volatile than Bank of China. It trades about -0.22 of its total potential returns per unit of risk. Bank of China is currently generating about 0.09 per unit of volatility. If you would invest 44.00 in Bank of China on September 22, 2024 and sell it today you would earn a total of 2.00 from holding Bank of China or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Bank of China
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Bank of China |
SERI INDUSTRIAL and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Bank of China
The main advantage of trading using opposite SERI INDUSTRIAL and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL 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.| SERI INDUSTRIAL vs. MIRAMAR HOTEL INV | SERI INDUSTRIAL vs. MHP Hotel AG | SERI INDUSTRIAL vs. Hyatt Hotels | SERI INDUSTRIAL vs. Summit Hotel Properties |
| Bank of China vs. EEDUCATION ALBERT AB | Bank of China vs. Perseus Mining Limited | Bank of China vs. GRIFFIN MINING LTD | Bank of China vs. SERI INDUSTRIAL EO |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |