Correlation Between Industrial Bank and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and BIT Computer 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 Industrial Bank and BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and BIT Computer Co, you can compare the effects of market volatilities on Industrial Bank and BIT Computer 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 Industrial Bank with a short position of BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and BIT Computer.
Diversification Opportunities for Industrial Bank and BIT Computer
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Industrial and BIT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer and Industrial Bank 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 Industrial Bank are associated (or correlated) with BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Industrial Bank i.e., Industrial Bank and BIT Computer go up and down completely randomly.
Pair Corralation between Industrial Bank and BIT Computer
Assuming the 90 days trading horizon Industrial Bank is expected to generate 7.76 times less return on investment than BIT Computer. But when comparing it to its historical volatility, Industrial Bank is 1.81 times less risky than BIT Computer. It trades about 0.03 of its potential returns per unit of risk. BIT Computer Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 479,500 in BIT Computer Co on January 23, 2025 and sell it today you would earn a total of 43,500 from holding BIT Computer Co or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. BIT Computer Co
Performance |
| Timeline |
| Industrial Bank |
| BIT Computer |
Industrial Bank and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and BIT Computer
The main advantage of trading using opposite Industrial Bank and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. Samsung Electronics Co | Industrial Bank vs. Hyundai Motor Co | Industrial Bank vs. Hyundai Motor Co |
| BIT Computer vs. Samsung Electronics Co | BIT Computer vs. Samsung Electronics Co | BIT Computer vs. SK Hynix | BIT Computer vs. POSCO Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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