Correlation Between Bank of China and Suzhou TFC
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By analyzing existing cross correlation between Bank of China and Suzhou TFC Optical, you can compare the effects of market volatilities on Bank of China and Suzhou TFC 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 Suzhou TFC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Suzhou TFC.
Diversification Opportunities for Bank of China and Suzhou TFC
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Suzhou is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Suzhou TFC Optical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou TFC Optical 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 Suzhou TFC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou TFC Optical has no effect on the direction of Bank of China i.e., Bank of China and Suzhou TFC go up and down completely randomly.
Pair Corralation between Bank of China and Suzhou TFC
Assuming the 90 days trading horizon Bank of China is expected to generate 0.34 times more return on investment than Suzhou TFC. However, Bank of China is 2.93 times less risky than Suzhou TFC. It trades about 0.44 of its potential returns per unit of risk. Suzhou TFC Optical is currently generating about -0.09 per unit of risk. If you would invest 491.00 in Bank of China on September 24, 2024 and sell it today you would earn a total of 45.00 from holding Bank of China or generate 9.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Bank of China vs. Suzhou TFC Optical
Performance |
Timeline |
Bank of China |
Suzhou TFC Optical |
Bank of China and Suzhou TFC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Suzhou TFC
The main advantage of trading using opposite Bank of China and Suzhou TFC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Suzhou TFC 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 Suzhou TFC will offset losses from the drop in Suzhou TFC's long position.Bank of China vs. Elite Color Environmental | Bank of China vs. Oppein Home Group | Bank of China vs. Tianjin Capital Environmental | Bank of China vs. Everdisplay Optronics Shanghai |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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