Correlation Between BP PLC and BANK OF NINGBO

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Can any of the company-specific risk be diversified away by investing in both BP PLC 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 BP PLC 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 BP PLC 0 and BANK OF NINGBO, you can compare the effects of market volatilities on BP PLC 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 BP PLC with a short position of BANK OF NINGBO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and BANK OF NINGBO.

Diversification Opportunities for BP PLC and BANK OF NINGBO

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between BP PLC and 002142 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC 0 25 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 BP PLC 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 BP PLC 0 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 BP PLC i.e., BP PLC and BANK OF NINGBO go up and down completely randomly.

Pair Corralation between BP PLC and BANK OF NINGBO

Given the investment horizon of 90 days BP PLC 0 is expected to generate 0.92 times more return on investment than BANK OF NINGBO. However, BP PLC 0 is 1.09 times less risky than BANK OF NINGBO. It trades about 0.06 of its potential returns per unit of risk. BANK OF NINGBO is currently generating about 0.0 per unit of risk. If you would invest  24,758  in BP PLC 0 on May 17, 2022 and sell it today you would earn a total of  18,297  from holding BP PLC 0 or generate 73.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy78.5%
ValuesDaily Returns

BP PLC 0 25  vs.  BANK OF NINGBO CO

 Performance (%) 
       Timeline  
BP PLC 0 
BP PLC Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BP PLC 0 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, BP PLC is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

BP PLC 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

BP PLC and BANK OF NINGBO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BP PLC and BANK OF NINGBO

The main advantage of trading using opposite BP PLC and BANK OF NINGBO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC 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.
The idea behind BP PLC 0 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.

BANK OF NINGBO

Pair trading matchups for BANK OF NINGBO

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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