Correlation Between Postal Savings and BOC Hong
Can any of the company-specific risk be diversified away by investing in both Postal Savings and BOC Hong 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 Postal Savings and BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and BOC Hong Kong, you can compare the effects of market volatilities on Postal Savings and BOC Hong 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 Postal Savings with a short position of BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and BOC Hong.
Diversification Opportunities for Postal Savings and BOC Hong
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Postal and BOC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong and Postal Savings 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 Postal Savings Bank are associated (or correlated) with BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of Postal Savings i.e., Postal Savings and BOC Hong go up and down completely randomly.
Pair Corralation between Postal Savings and BOC Hong
If you would invest 6,620 in BOC Hong Kong on August 27, 2024 and sell it today you would earn a total of 33.00 from holding BOC Hong Kong or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. BOC Hong Kong
Performance |
| Timeline |
| Postal Savings Bank |
| BOC Hong Kong |
Postal Savings and BOC Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and BOC Hong
The main advantage of trading using opposite Postal Savings and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.| Postal Savings vs. China Merchants Bank | Postal Savings vs. China Merchants Bank | Postal Savings vs. Community West Bancshares | Postal Savings vs. China Everbright Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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