Correlation Between Industrial Bank and Clean Science
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Clean Science 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 Clean Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Clean Science co, you can compare the effects of market volatilities on Industrial Bank and Clean Science 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 Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Clean Science.
Diversification Opportunities for Industrial Bank and Clean Science
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Clean is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co 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 Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of Industrial Bank i.e., Industrial Bank and Clean Science go up and down completely randomly.
Pair Corralation between Industrial Bank and Clean Science
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.57 times more return on investment than Clean Science. However, Industrial Bank is 1.76 times less risky than Clean Science. It trades about 0.11 of its potential returns per unit of risk. Clean Science co is currently generating about -0.06 per unit of risk. If you would invest 963,340 in Industrial Bank on August 31, 2024 and sell it today you would earn a total of 545,660 from holding Industrial Bank or generate 56.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Industrial Bank vs. Clean Science co
Performance |
| Timeline |
| Industrial Bank |
| Clean Science co |
Industrial Bank and Clean Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Clean Science
The main advantage of trading using opposite Industrial Bank and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.| Industrial Bank vs. Hannong Chemicals | Industrial Bank vs. EBEST Investment Securities | Industrial Bank vs. DSC Investment | Industrial Bank vs. E Investment Development |
| Clean Science vs. Korea New Network | Clean Science vs. ICD Co | Clean Science vs. DYPNF CoLtd | Clean Science vs. Busan Industrial Co |
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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