Correlation Between Bank Central and China Everbright

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank Central and China Everbright 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 Bank Central and China Everbright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and China Everbright Environment, you can compare the effects of market volatilities on Bank Central and China Everbright 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 Central with a short position of China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and China Everbright.

Diversification Opportunities for Bank Central and China Everbright

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bank and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and China Everbright Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Env and Bank Central 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 Central Asia are associated (or correlated) with China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Env has no effect on the direction of Bank Central i.e., Bank Central and China Everbright go up and down completely randomly.

Pair Corralation between Bank Central and China Everbright

If you would invest  39.00  in China Everbright Environment on October 4, 2024 and sell it today you would earn a total of  0.00  from holding China Everbright Environment or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy4.76%
ValuesDaily Returns

Bank Central Asia  vs.  China Everbright Environment

 Performance 
       Timeline  
Bank Central Asia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15NovDecDecJan1414.51515.51616.51717.518
China Everbright Env 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days China Everbright Environment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, China Everbright is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Bank Central and China Everbright Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Central and China Everbright

The main advantage of trading using opposite Bank Central and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.
The idea behind Bank Central Asia and China Everbright Environment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets


 

Discover investing ideas

Utilize additional investing modules