Correlation Between Industrial Bank and Xilong Chemical
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By analyzing existing cross correlation between Industrial Bank Co and Xilong Chemical Co, you can compare the effects of market volatilities on Industrial Bank and Xilong Chemical 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 Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Xilong Chemical.
Diversification Opportunities for Industrial Bank and Xilong Chemical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Xilong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical 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 Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Industrial Bank i.e., Industrial Bank and Xilong Chemical go up and down completely randomly.
Pair Corralation between Industrial Bank and Xilong Chemical
Assuming the 90 days trading horizon Industrial Bank is expected to generate 3.1 times less return on investment than Xilong Chemical. But when comparing it to its historical volatility, Industrial Bank Co is 2.74 times less risky than Xilong Chemical. It trades about 0.03 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 724.00 in Xilong Chemical Co on September 5, 2024 and sell it today you would earn a total of 153.00 from holding Xilong Chemical Co or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Xilong Chemical Co
Performance |
| Timeline |
| Industrial Bank |
| Xilong Chemical |
Industrial Bank and Xilong Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Xilong Chemical
The main advantage of trading using opposite Industrial Bank and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.| Industrial Bank vs. Epoxy Base Electronic | Industrial Bank vs. CGN Nuclear Technology | Industrial Bank vs. Jiangyin Jianghua Microelectronics | Industrial Bank vs. Changchun UP Optotech |
| Xilong Chemical vs. Jinling Hotel Corp | Xilong Chemical vs. Guangzhou KingTeller Technology | Xilong Chemical vs. Hangzhou Pinming Software | Xilong Chemical vs. XinJiang GuoTong Pipeline |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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