Correlation Between Bank of China and Ningxia Xiaoming
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By analyzing existing cross correlation between Bank of China and Ningxia Xiaoming Agriculture, you can compare the effects of market volatilities on Bank of China and Ningxia Xiaoming 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 Ningxia Xiaoming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Ningxia Xiaoming.
Diversification Opportunities for Bank of China and Ningxia Xiaoming
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ningxia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Ningxia Xiaoming Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Xiaoming Agr 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 Ningxia Xiaoming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Xiaoming Agr has no effect on the direction of Bank of China i.e., Bank of China and Ningxia Xiaoming go up and down completely randomly.
Pair Corralation between Bank of China and Ningxia Xiaoming
Assuming the 90 days trading horizon Bank of China is expected to generate 4.38 times less return on investment than Ningxia Xiaoming. But when comparing it to its historical volatility, Bank of China is 3.33 times less risky than Ningxia Xiaoming. It trades about 0.14 of its potential returns per unit of risk. Ningxia Xiaoming Agriculture is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 880.00 in Ningxia Xiaoming Agriculture on September 16, 2024 and sell it today you would earn a total of 479.00 from holding Ningxia Xiaoming Agriculture or generate 54.43% 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. Ningxia Xiaoming Agriculture
Performance |
Timeline |
Bank of China |
Ningxia Xiaoming Agr |
Bank of China and Ningxia Xiaoming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Ningxia Xiaoming
The main advantage of trading using opposite Bank of China and Ningxia Xiaoming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Ningxia Xiaoming 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 Ningxia Xiaoming will offset losses from the drop in Ningxia Xiaoming's long position.Bank of China vs. Kingsignal Technology Co | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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