Correlation Between BOC Hong and Bank
Can any of the company-specific risk be diversified away by investing in both BOC Hong and Bank 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 BOC Hong and Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and Bank, you can compare the effects of market volatilities on BOC Hong and Bank 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 BOC Hong with a short position of Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and Bank.
Diversification Opportunities for BOC Hong and Bank
Pay attention - limited upside
The 3 months correlation between BOC and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank and BOC Hong 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 BOC Hong Kong are associated (or correlated) with Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank has no effect on the direction of BOC Hong i.e., BOC Hong and Bank go up and down completely randomly.
Pair Corralation between BOC Hong and Bank
If you would invest 6,175 in BOC Hong Kong on December 1, 2024 and sell it today you would earn a total of 845.00 from holding BOC Hong Kong or generate 13.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
BOC Hong Kong vs. Bank
Performance |
Timeline |
BOC Hong Kong |
Bank |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
BOC Hong and Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BOC Hong and Bank
The main advantage of trading using opposite BOC Hong and Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong position performs unexpectedly, Bank 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 Bank will offset losses from the drop in Bank's long position.BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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