Correlation Between Bank of China and Caitong Securities
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By analyzing existing cross correlation between Bank of China and Caitong Securities Co, you can compare the effects of market volatilities on Bank of China and Caitong Securities 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 Caitong Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Caitong Securities.
Diversification Opportunities for Bank of China and Caitong Securities
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Caitong is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Caitong Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caitong Securities 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 Caitong Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caitong Securities has no effect on the direction of Bank of China i.e., Bank of China and Caitong Securities go up and down completely randomly.
Pair Corralation between Bank of China and Caitong Securities
Assuming the 90 days trading horizon Bank of China is expected to generate 0.54 times more return on investment than Caitong Securities. However, Bank of China is 1.85 times less risky than Caitong Securities. It trades about 0.11 of its potential returns per unit of risk. Caitong Securities Co is currently generating about -0.1 per unit of risk. If you would invest 497.00 in Bank of China on October 5, 2024 and sell it today you would earn a total of 40.00 from holding Bank of China or generate 8.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of China vs. Caitong Securities Co
Performance |
Timeline |
Bank of China |
Caitong Securities |
Bank of China and Caitong Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Caitong Securities
The main advantage of trading using opposite Bank of China and Caitong Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Caitong Securities 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 Caitong Securities will offset losses from the drop in Caitong Securities' long position.Bank of China vs. Guangdong Wens Foodstuff | Bank of China vs. Muyuan Foodstuff Co | Bank of China vs. Tongding Interconnection Information | Bank of China vs. Fujian Anjoy Foods |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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