Correlation Between Alphabet and BANK OF SUZHOU

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

Diversification Opportunities for Alphabet and BANK OF SUZHOU

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Alphabet and 002966 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Cl A and BANK OF SUZHOU CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF SUZHOU and Alphabet 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 Alphabet Cl A are associated (or correlated) with BANK OF SUZHOU. 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 SUZHOU has no effect on the direction of Alphabet i.e., Alphabet and BANK OF SUZHOU go up and down completely randomly.

Pair Corralation between Alphabet and BANK OF SUZHOU

Assuming the 90 days horizon Alphabet Cl A is expected to under-perform the BANK OF SUZHOU. In addition to that, Alphabet is 2.59 times more volatile than BANK OF SUZHOU. It trades about -0.37 of its total potential returns per unit of risk. BANK OF SUZHOU is currently generating about 0.33 per unit of volatility. If you would invest  640.00  in BANK OF SUZHOU on June 26, 2022 and sell it today you would earn a total of  32.00  from holding BANK OF SUZHOU or generate 5.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy86.36%
ValuesDaily Returns

Alphabet Cl A  vs.  BANK OF SUZHOU CO

 Performance (%) 
       Timeline  
Alphabet Cl A 
Alphabet Performance
0 of 100
Over the last 90 days Alphabet Cl A has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively steady which may send shares a bit higher in October 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Alphabet Price Channel

BANK OF SUZHOU 
002966 Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BANK OF SUZHOU are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BANK OF SUZHOU sustained solid returns over the last few months and may actually be approaching a breakup point.

002966 Price Channel

Alphabet and BANK OF SUZHOU Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alphabet and BANK OF SUZHOU

The main advantage of trading using opposite Alphabet and BANK OF SUZHOU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, BANK OF SUZHOU 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 SUZHOU will offset losses from the drop in BANK OF SUZHOU's long position.
Alphabet vs. Industrias Bachoco SA
The idea behind Alphabet Cl A and BANK OF SUZHOU 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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