Correlation Between Jinlong Machinery and Industrial Bank
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By analyzing existing cross correlation between Jinlong Machinery Electronic and Industrial Bank Co, you can compare the effects of market volatilities on Jinlong Machinery 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 Jinlong Machinery with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinlong Machinery and Industrial Bank.
Diversification Opportunities for Jinlong Machinery and Industrial Bank
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jinlong and Industrial is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jinlong Machinery Electronic and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Jinlong Machinery 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 Jinlong Machinery Electronic 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 Jinlong Machinery i.e., Jinlong Machinery and Industrial Bank go up and down completely randomly.
Pair Corralation between Jinlong Machinery and Industrial Bank
Assuming the 90 days trading horizon Jinlong Machinery Electronic is expected to under-perform the Industrial Bank. In addition to that, Jinlong Machinery is 3.78 times more volatile than Industrial Bank Co. It trades about -0.25 of its total potential returns per unit of risk. Industrial Bank Co is currently generating about 0.34 per unit of volatility. If you would invest 1,822 in Industrial Bank Co on October 17, 2024 and sell it today you would earn a total of 139.00 from holding Industrial Bank Co or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinlong Machinery Electronic vs. Industrial Bank Co
Performance |
| Timeline |
| Jinlong Machinery |
| Industrial Bank |
Jinlong Machinery and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinlong Machinery and Industrial Bank
The main advantage of trading using opposite Jinlong Machinery and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinlong Machinery 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.| Jinlong Machinery vs. Western Metal Materials | Jinlong Machinery vs. Caihong Display Devices | Jinlong Machinery vs. Bank of Suzhou | Jinlong Machinery vs. Ningbo Tip Rubber |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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