Correlation Between ISoftStone Information and Bank of XiAn
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By analyzing existing cross correlation between iSoftStone Information Technology and Bank of XiAn, you can compare the effects of market volatilities on ISoftStone Information and Bank of XiAn 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 ISoftStone Information with a short position of Bank of XiAn. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISoftStone Information and Bank of XiAn.
Diversification Opportunities for ISoftStone Information and Bank of XiAn
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ISoftStone and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iSoftStone Information Technol and Bank of XiAn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of XiAn and ISoftStone Information 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 iSoftStone Information Technology are associated (or correlated) with Bank of XiAn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of XiAn has no effect on the direction of ISoftStone Information i.e., ISoftStone Information and Bank of XiAn go up and down completely randomly.
Pair Corralation between ISoftStone Information and Bank of XiAn
Assuming the 90 days trading horizon iSoftStone Information Technology is expected to generate 1.86 times more return on investment than Bank of XiAn. However, ISoftStone Information is 1.86 times more volatile than Bank of XiAn. It trades about 0.03 of its potential returns per unit of risk. Bank of XiAn is currently generating about 0.04 per unit of risk. If you would invest 6,230 in iSoftStone Information Technology on September 4, 2024 and sell it today you would earn a total of 74.00 from holding iSoftStone Information Technology or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSoftStone Information Technol vs. Bank of XiAn
Performance |
| Timeline |
| iSoftStone Information |
| Bank of XiAn |
ISoftStone Information and Bank of XiAn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISoftStone Information and Bank of XiAn
The main advantage of trading using opposite ISoftStone Information and Bank of XiAn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISoftStone Information position performs unexpectedly, Bank of XiAn 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 Bank of XiAn will offset losses from the drop in Bank of XiAn's long position.The idea behind iSoftStone Information Technology and Bank of XiAn pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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