Correlation Between Bank of China and A Zenith
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By analyzing existing cross correlation between Bank of China and A Zenith Home Furnishings, you can compare the effects of market volatilities on Bank of China and A Zenith 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 A Zenith. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and A Zenith.
Diversification Opportunities for Bank of China and A Zenith
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and 603389 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and A Zenith Home Furnishings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Zenith Home 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 A Zenith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Zenith Home has no effect on the direction of Bank of China i.e., Bank of China and A Zenith go up and down completely randomly.
Pair Corralation between Bank of China and A Zenith
Assuming the 90 days trading horizon Bank of China is expected to generate 1.91 times less return on investment than A Zenith. But when comparing it to its historical volatility, Bank of China is 3.47 times less risky than A Zenith. It trades about 0.17 of its potential returns per unit of risk. A Zenith Home Furnishings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 652.00 in A Zenith Home Furnishings on September 19, 2024 and sell it today you would earn a total of 144.00 from holding A Zenith Home Furnishings or generate 22.09% 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. A Zenith Home Furnishings
Performance |
Timeline |
Bank of China |
A Zenith Home |
Bank of China and A Zenith Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and A Zenith
The main advantage of trading using opposite Bank of China and A Zenith positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, A Zenith 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 A Zenith will offset losses from the drop in A Zenith's long position.Bank of China vs. Eastroc Beverage Group | Bank of China vs. Jiahe Foods Industry | Bank of China vs. Inly Media Co | Bank of China vs. Duzhe Publishing Media |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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