Correlation Between GuoChuang Software and Industrial Bank
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By analyzing existing cross correlation between GuoChuang Software Co and Industrial Bank Co, you can compare the effects of market volatilities on GuoChuang Software 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 GuoChuang Software with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GuoChuang Software and Industrial Bank.
Diversification Opportunities for GuoChuang Software and Industrial Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GuoChuang and Industrial is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding GuoChuang Software Co and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and GuoChuang Software 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 GuoChuang Software Co 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 GuoChuang Software i.e., GuoChuang Software and Industrial Bank go up and down completely randomly.
Pair Corralation between GuoChuang Software and Industrial Bank
Assuming the 90 days trading horizon GuoChuang Software Co is expected to generate 3.63 times more return on investment than Industrial Bank. However, GuoChuang Software is 3.63 times more volatile than Industrial Bank Co. It trades about 0.01 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 2,549 in GuoChuang Software Co on August 31, 2024 and sell it today you would lose (44.00) from holding GuoChuang Software Co or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GuoChuang Software Co vs. Industrial Bank Co
Performance |
| Timeline |
| GuoChuang Software |
| Industrial Bank |
GuoChuang Software and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GuoChuang Software and Industrial Bank
The main advantage of trading using opposite GuoChuang Software and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GuoChuang Software 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.| GuoChuang Software vs. Kweichow Moutai Co | GuoChuang Software vs. NAURA Technology Group | GuoChuang Software vs. APT Medical | GuoChuang Software vs. Contemporary Amperex Technology |
| Industrial Bank vs. Agricultural Bank of | Industrial Bank vs. Hangzhou Pinming Software | Industrial Bank vs. Shandong Mining Machinery | Industrial Bank vs. GuoChuang Software 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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