Correlation Between Bank of China and Ningbo Fujia
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By analyzing existing cross correlation between Bank of China and Ningbo Fujia Industrial, you can compare the effects of market volatilities on Bank of China and Ningbo Fujia 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 Ningbo Fujia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Ningbo Fujia.
Diversification Opportunities for Bank of China and Ningbo Fujia
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Ningbo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Ningbo Fujia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fujia Industrial 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 Ningbo Fujia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fujia Industrial has no effect on the direction of Bank of China i.e., Bank of China and Ningbo Fujia go up and down completely randomly.
Pair Corralation between Bank of China and Ningbo Fujia
Assuming the 90 days trading horizon Bank of China is expected to generate 1.73 times less return on investment than Ningbo Fujia. But when comparing it to its historical volatility, Bank of China is 3.78 times less risky than Ningbo Fujia. It trades about 0.44 of its potential returns per unit of risk. Ningbo Fujia Industrial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,268 in Ningbo Fujia Industrial on September 28, 2024 and sell it today you would earn a total of 200.00 from holding Ningbo Fujia Industrial or generate 15.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Bank of China vs. Ningbo Fujia Industrial
Performance |
Timeline |
Bank of China |
Ningbo Fujia Industrial |
Bank of China and Ningbo Fujia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Ningbo Fujia
The main advantage of trading using opposite Bank of China and Ningbo Fujia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Ningbo Fujia 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 Ningbo Fujia will offset losses from the drop in Ningbo Fujia'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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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