Correlation Between Bank of China Limited and Cogobuy
Can any of the company-specific risk be diversified away by investing in both Bank of China Limited and Cogobuy 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 Bank of China Limited and Cogobuy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of China and Cogobuy Group, you can compare the effects of market volatilities on Bank of China Limited and Cogobuy 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 Bank of China Limited with a short position of Cogobuy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China Limited and Cogobuy.
Diversification Opportunities for Bank of China Limited and Cogobuy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Cogobuy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Cogobuy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogobuy Group and Bank of China Limited 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 Bank of China are associated (or correlated) with Cogobuy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogobuy Group has no effect on the direction of Bank of China Limited i.e., Bank of China Limited and Cogobuy go up and down completely randomly.
Pair Corralation between Bank of China Limited and Cogobuy
Assuming the 90 days horizon Bank of China is expected to generate 0.53 times more return on investment than Cogobuy. However, Bank of China is 1.88 times less risky than Cogobuy. It trades about -0.05 of its potential returns per unit of risk. Cogobuy Group is currently generating about -0.23 per unit of risk. If you would invest 44.00 in Bank of China on August 31, 2024 and sell it today you would lose (1.00) from holding Bank of China or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Cogobuy Group
Performance |
| Timeline |
| Bank of China Limited |
| Cogobuy Group |
Bank of China Limited and Cogobuy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China Limited and Cogobuy
The main advantage of trading using opposite Bank of China Limited and Cogobuy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China Limited position performs unexpectedly, Cogobuy 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 Cogobuy will offset losses from the drop in Cogobuy's long position.| Bank of China Limited vs. Verizon Communications | Bank of China Limited vs. MTI WIRELESS EDGE | Bank of China Limited vs. Hanison Construction Holdings | Bank of China Limited vs. SBA Communications Corp |
| Cogobuy vs. United Natural Foods | Cogobuy vs. WILLIS LEASE FIN | Cogobuy vs. Astral Foods Limited | Cogobuy vs. United States Steel |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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