Correlation Between Bgc Partners and BANK OF NINGBO

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Can any of the company-specific risk be diversified away by investing in both Bgc Partners and BANK OF NINGBO 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 Bgc Partners and BANK OF NINGBO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bgc Partners Cl and BANK OF NINGBO, you can compare the effects of market volatilities on Bgc Partners and BANK OF NINGBO 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 Bgc Partners with a short position of BANK OF NINGBO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bgc Partners and BANK OF NINGBO.

Diversification Opportunities for Bgc Partners and BANK OF NINGBO

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bgc Partners and 002142 is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bgc Partners Cl and BANK OF NINGBO CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF NINGBO and Bgc Partners 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 Bgc Partners Cl are associated (or correlated) with BANK OF NINGBO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF NINGBO has no effect on the direction of Bgc Partners i.e., Bgc Partners and BANK OF NINGBO go up and down completely randomly.

Pair Corralation between Bgc Partners and BANK OF NINGBO

Given the investment horizon of 90 days Bgc Partners Cl is expected to under-perform the BANK OF NINGBO. In addition to that, Bgc Partners is 1.01 times more volatile than BANK OF NINGBO. It trades about -0.24 of its total potential returns per unit of risk. BANK OF NINGBO is currently generating about 0.26 per unit of volatility. If you would invest  2,827  in BANK OF NINGBO on June 27, 2022 and sell it today you would earn a total of  315.00  from holding BANK OF NINGBO or generate 11.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy90.48%
ValuesDaily Returns

Bgc Partners Cl  vs.  BANK OF NINGBO CO

 Performance (%) 
       Timeline  
Bgc Partners Cl 
Bgc Partners Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bgc Partners Cl are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Bgc Partners may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Bgc Partners Price Channel

BANK OF NINGBO 
002142 Performance
0 of 100
Over the last 90 days BANK OF NINGBO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

002142 Price Channel

Bgc Partners and BANK OF NINGBO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bgc Partners and BANK OF NINGBO

The main advantage of trading using opposite Bgc Partners and BANK OF NINGBO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bgc Partners position performs unexpectedly, BANK OF NINGBO 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 BANK OF NINGBO will offset losses from the drop in BANK OF NINGBO's long position.
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The idea behind Bgc Partners Cl and BANK OF NINGBO 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.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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