Correlation Between Longxing Chemical and Industrial Bank
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By analyzing existing cross correlation between Longxing Chemical Stock and Industrial Bank Co, you can compare the effects of market volatilities on Longxing Chemical and Industrial Bank 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 Longxing Chemical with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Industrial Bank.
Diversification Opportunities for Longxing Chemical and Industrial Bank
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longxing and Industrial is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Longxing Chemical 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 Longxing Chemical Stock are associated (or correlated) with Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Industrial Bank go up and down completely randomly.
Pair Corralation between Longxing Chemical and Industrial Bank
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 1.23 times more return on investment than Industrial Bank. However, Longxing Chemical is 1.23 times more volatile than Industrial Bank Co. It trades about 0.24 of its potential returns per unit of risk. Industrial Bank Co is currently generating about 0.13 per unit of risk. If you would invest 406.00 in Longxing Chemical Stock on September 12, 2024 and sell it today you would earn a total of 160.00 from holding Longxing Chemical Stock or generate 39.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Industrial Bank Co
Performance |
| Timeline |
| Longxing Chemical Stock |
| Industrial Bank |
Longxing Chemical and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Industrial Bank
The main advantage of trading using opposite Longxing Chemical and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| Longxing Chemical vs. Zijin Mining Group | Longxing Chemical vs. Huaibei Mining Holdings | Longxing Chemical vs. Tibet Huayu Mining | Longxing Chemical vs. Shenzhen Silver Basis |
| Industrial Bank vs. Industrial and Commercial | Industrial Bank vs. China Construction Bank | Industrial Bank vs. Bank of China | Industrial Bank vs. Agricultural Bank of |
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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