Correlation Between Industrial Bank and Hongrun Construction
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By analyzing existing cross correlation between Industrial Bank Co and Hongrun Construction Group, you can compare the effects of market volatilities on Industrial Bank and Hongrun Construction 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 Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Hongrun Construction.
Diversification Opportunities for Industrial Bank and Hongrun Construction
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Hongrun is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction 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 Co are associated (or correlated) with Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Industrial Bank i.e., Industrial Bank and Hongrun Construction go up and down completely randomly.
Pair Corralation between Industrial Bank and Hongrun Construction
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.63 times more return on investment than Hongrun Construction. However, Industrial Bank Co is 1.58 times less risky than Hongrun Construction. It trades about 0.14 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.0 per unit of risk. If you would invest 1,955 in Industrial Bank Co on October 29, 2024 and sell it today you would earn a total of 68.00 from holding Industrial Bank Co or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Hongrun Construction Group
Performance |
| Timeline |
| Industrial Bank |
| Hongrun Construction |
Industrial Bank and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Hongrun Construction
The main advantage of trading using opposite Industrial Bank and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Hongrun Construction 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| Industrial Bank vs. Thunder Software Technology | Industrial Bank vs. Allied Machinery Co | Industrial Bank vs. Nanxing Furniture Machinery | Industrial Bank vs. Masterwork Machinery |
| Hongrun Construction vs. Industrial and Commercial | Hongrun Construction vs. China Construction Bank | Hongrun Construction vs. Agricultural Bank of | Hongrun Construction vs. Bank of China |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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