Correlation Between Bank of China and JA Solar
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By analyzing existing cross correlation between Bank of China and JA Solar Technology, you can compare the effects of market volatilities on Bank of China and JA Solar 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 JA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and JA Solar.
Diversification Opportunities for Bank of China and JA Solar
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and 002459 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and JA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JA Solar Technology 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 JA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JA Solar Technology has no effect on the direction of Bank of China i.e., Bank of China and JA Solar go up and down completely randomly.
Pair Corralation between Bank of China and JA Solar
Assuming the 90 days trading horizon Bank of China is expected to generate 0.44 times more return on investment than JA Solar. However, Bank of China is 2.25 times less risky than JA Solar. It trades about 0.09 of its potential returns per unit of risk. JA Solar Technology is currently generating about -0.06 per unit of risk. If you would invest 298.00 in Bank of China on September 24, 2024 and sell it today you would earn a total of 228.00 from holding Bank of China or generate 76.51% 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. JA Solar Technology
Performance |
Timeline |
Bank of China |
JA Solar Technology |
Bank of China and JA Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and JA Solar
The main advantage of trading using opposite Bank of China and JA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, JA Solar 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 JA Solar will offset losses from the drop in JA Solar'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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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