Correlation Between Bank of China and John Bean
Can any of the company-specific risk be diversified away by investing in both Bank of China and John Bean 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 and John Bean 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 John Bean Technologies, you can compare the effects of market volatilities on Bank of China and John Bean 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 with a short position of John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and John Bean.
Diversification Opportunities for Bank of China and John Bean
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and John is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies and Bank of China 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of Bank of China i.e., Bank of China and John Bean go up and down completely randomly.
Pair Corralation between Bank of China and John Bean
Assuming the 90 days horizon Bank of China is expected to generate 2.92 times more return on investment than John Bean. However, Bank of China is 2.92 times more volatile than John Bean Technologies. It trades about 0.06 of its potential returns per unit of risk. John Bean Technologies is currently generating about 0.03 per unit of risk. If you would invest 15.00 in Bank of China on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Bank of China or generate 193.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. John Bean Technologies
Performance |
| Timeline |
| Bank of China |
| John Bean Technologies |
Bank of China and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and John Bean
The main advantage of trading using opposite Bank of China and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| Bank of China vs. Perdoceo Education | Bank of China vs. Strategic Education | Bank of China vs. ONWARD MEDICAL BV | Bank of China vs. CompuGroup Medical SE |
| John Bean vs. ANTA SPORTS PRODUCT | John Bean vs. WILLIS LEASE FIN | John Bean vs. Ming Le Sports | John Bean vs. USWE SPORTS AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |