Correlation Between Shanghai Pudong and Industrial Bank
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By analyzing existing cross correlation between Shanghai Pudong Development and Industrial Bank Co, you can compare the effects of market volatilities on Shanghai Pudong 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 Shanghai Pudong with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Industrial Bank.
Diversification Opportunities for Shanghai Pudong and Industrial Bank
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Industrial is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Shanghai Pudong 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 Shanghai Pudong Development 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 Shanghai Pudong i.e., Shanghai Pudong and Industrial Bank go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Industrial Bank
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to generate 0.96 times more return on investment than Industrial Bank. However, Shanghai Pudong Development is 1.04 times less risky than Industrial Bank. It trades about 0.08 of its potential returns per unit of risk. Industrial Bank Co is currently generating about 0.07 per unit of risk. If you would invest 855.00 in Shanghai Pudong Development on August 29, 2024 and sell it today you would earn a total of 76.00 from holding Shanghai Pudong Development or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Industrial Bank Co
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Industrial Bank |
Shanghai Pudong and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Industrial Bank
The main advantage of trading using opposite Shanghai Pudong and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong 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.| Shanghai Pudong vs. Hang Xiao Steel | Shanghai Pudong vs. Gansu Jiu Steel | Shanghai Pudong vs. Tianjin Capital Environmental | Shanghai Pudong vs. Eit Environmental Development |
| Industrial Bank vs. Bomin Electronics Co | Industrial Bank vs. Zhangjiagang Freetrade Science | Industrial Bank vs. Nantong Haixing Electronics | Industrial Bank vs. TongFu Microelectronics 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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