Correlation Between Industrial Bank and Shenzhen MTC
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By analyzing existing cross correlation between Industrial Bank Co and Shenzhen MTC Co, you can compare the effects of market volatilities on Industrial Bank and Shenzhen MTC 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 Shenzhen MTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Shenzhen MTC.
Diversification Opportunities for Industrial Bank and Shenzhen MTC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Shenzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Shenzhen MTC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MTC 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 Shenzhen MTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MTC has no effect on the direction of Industrial Bank i.e., Industrial Bank and Shenzhen MTC go up and down completely randomly.
Pair Corralation between Industrial Bank and Shenzhen MTC
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.6 times more return on investment than Shenzhen MTC. However, Industrial Bank Co is 1.66 times less risky than Shenzhen MTC. It trades about -0.18 of its potential returns per unit of risk. Shenzhen MTC Co is currently generating about -0.14 per unit of risk. If you would invest 1,902 in Industrial Bank Co on August 29, 2024 and sell it today you would lose (106.00) from holding Industrial Bank Co or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Shenzhen MTC Co
Performance |
| Timeline |
| Industrial Bank |
| Shenzhen MTC |
Industrial Bank and Shenzhen MTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Shenzhen MTC
The main advantage of trading using opposite Industrial Bank and Shenzhen MTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Shenzhen MTC 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 Shenzhen MTC will offset losses from the drop in Shenzhen MTC's long position.| Industrial Bank vs. Beijing Mainstreets Investment | Industrial Bank vs. Xiandai Investment Co | Industrial Bank vs. Air China Ltd | Industrial Bank vs. Holitech Technology Co |
| Shenzhen MTC vs. Kweichow Moutai Co | Shenzhen MTC vs. NAURA Technology Group | Shenzhen MTC vs. Zhejiang Orient Gene | Shenzhen MTC vs. APT Medical |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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