Correlation Between Bank of China and Humanwell Healthcare
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By analyzing existing cross correlation between Bank of China and Humanwell Healthcare Group, you can compare the effects of market volatilities on Bank of China and Humanwell Healthcare 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 Humanwell Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Humanwell Healthcare.
Diversification Opportunities for Bank of China and Humanwell Healthcare
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Humanwell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Humanwell Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanwell Healthcare 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 Humanwell Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanwell Healthcare has no effect on the direction of Bank of China i.e., Bank of China and Humanwell Healthcare go up and down completely randomly.
Pair Corralation between Bank of China and Humanwell Healthcare
Assuming the 90 days trading horizon Bank of China is expected to generate 1.75 times less return on investment than Humanwell Healthcare. But when comparing it to its historical volatility, Bank of China is 2.32 times less risky than Humanwell Healthcare. It trades about 0.17 of its potential returns per unit of risk. Humanwell Healthcare Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,197 in Humanwell Healthcare Group on September 8, 2024 and sell it today you would earn a total of 140.00 from holding Humanwell Healthcare Group or generate 6.37% 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. Humanwell Healthcare Group
Performance |
Timeline |
Bank of China |
Humanwell Healthcare |
Bank of China and Humanwell Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and Humanwell Healthcare
The main advantage of trading using opposite Bank of China and Humanwell Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China position performs unexpectedly, Humanwell Healthcare 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 Humanwell Healthcare will offset losses from the drop in Humanwell Healthcare's long position.Bank of China vs. Heilongjiang Transport Development | Bank of China vs. Anhui Jianghuai Automobile | Bank of China vs. China Aluminum International | Bank of China vs. Hainan Haiqi Transportation |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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