Correlation Between Bank of China and Glodon Software
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By analyzing existing cross correlation between Bank of China and Glodon Software Co, you can compare the effects of market volatilities on Bank of China and Glodon Software 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 Glodon Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Glodon Software.
Diversification Opportunities for Bank of China and Glodon Software
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Glodon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Glodon Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glodon Software 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 Glodon Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glodon Software has no effect on the direction of Bank of China i.e., Bank of China and Glodon Software go up and down completely randomly.
Pair Corralation between Bank of China and Glodon Software
Assuming the 90 days trading horizon Bank of China is expected to generate 3.83 times less return on investment than Glodon Software. But when comparing it to its historical volatility, Bank of China is 3.32 times less risky than Glodon Software. It trades about 0.1 of its potential returns per unit of risk. Glodon Software Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Glodon Software Co on September 24, 2024 and sell it today you would earn a total of 268.00 from holding Glodon Software Co or generate 26.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of China vs. Glodon Software Co
Performance |
Timeline |
Bank of China |
Glodon Software |
Bank of China and Glodon Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Glodon Software
The main advantage of trading using opposite Bank of China and Glodon Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Glodon Software 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 Glodon Software will offset losses from the drop in Glodon Software's long position.Bank of China vs. Industrial and Commercial | Bank of China vs. Kweichow Moutai Co | Bank of China vs. Agricultural Bank of | Bank of China vs. China Mobile Limited |
Glodon Software vs. Industrial and Commercial | Glodon Software vs. Agricultural Bank of | Glodon Software vs. China Construction Bank | Glodon Software vs. Bank of China |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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