Correlation Between Industrial Bank and Kuangda Technology
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By analyzing existing cross correlation between Industrial Bank Co and Kuangda Technology Group, you can compare the effects of market volatilities on Industrial Bank and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Kuangda Technology.
Diversification Opportunities for Industrial Bank and Kuangda Technology
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and Kuangda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Industrial Bank i.e., Industrial Bank and Kuangda Technology go up and down completely randomly.
Pair Corralation between Industrial Bank and Kuangda Technology
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.54 times more return on investment than Kuangda Technology. However, Industrial Bank Co is 1.86 times less risky than Kuangda Technology. It trades about 0.08 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.04 per unit of risk. If you would invest 1,577 in Industrial Bank Co on October 12, 2024 and sell it today you would earn a total of 384.00 from holding Industrial Bank Co or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Kuangda Technology Group
Performance |
| Timeline |
| Industrial Bank |
| Kuangda Technology |
Industrial Bank and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Kuangda Technology
The main advantage of trading using opposite Industrial Bank and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Industrial Bank vs. Gan Yuan Foods | Industrial Bank vs. Eastroc Beverage Group | Industrial Bank vs. Qingdao Foods Co | Industrial Bank vs. Great Sun Foods Co |
| Kuangda Technology vs. Kuang Chi Technologies | Kuangda Technology vs. Shanghai Shibei Hi Tech | Kuangda Technology vs. Hangzhou Arcvideo Technology | Kuangda Technology vs. Harbin Air Conditioning |
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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