Correlation Between BANK OF CHINA and CryoLife
Can any of the company-specific risk be diversified away by investing in both BANK OF CHINA and CryoLife 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 CryoLife 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 CryoLife, you can compare the effects of market volatilities on BANK OF CHINA and CryoLife 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 CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and CryoLife.
Diversification Opportunities for BANK OF CHINA and CryoLife
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and CryoLife is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of BANK OF CHINA i.e., BANK OF CHINA and CryoLife go up and down completely randomly.
Pair Corralation between BANK OF CHINA and CryoLife
Assuming the 90 days trading horizon BANK OF CHINA is expected to generate 2.61 times more return on investment than CryoLife. However, BANK OF CHINA is 2.61 times more volatile than CryoLife. It trades about 0.07 of its potential returns per unit of risk. CryoLife is currently generating about 0.08 per unit of risk. If you would invest 10.00 in BANK OF CHINA on October 25, 2024 and sell it today you would earn a total of 38.00 from holding BANK OF CHINA or generate 380.0% 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. CryoLife
Performance |
| Timeline |
| BANK OF CHINA |
| CryoLife |
BANK OF CHINA and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF CHINA and CryoLife
The main advantage of trading using opposite BANK OF CHINA and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife's long position.| BANK OF CHINA vs. ANTA SPORTS PRODUCT | BANK OF CHINA vs. SPORT LISBOA E | BANK OF CHINA vs. Air Transport Services | BANK OF CHINA vs. Datadog |
| CryoLife vs. BANK OF CHINA | CryoLife vs. SUN LIFE FINANCIAL | CryoLife vs. United Insurance Holdings | CryoLife vs. AGNC INVESTMENT |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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