Correlation Between Industrial Bank and Guangzhou Jointas
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By analyzing existing cross correlation between Industrial Bank Co and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Industrial Bank and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Guangzhou Jointas.
Diversification Opportunities for Industrial Bank and Guangzhou Jointas
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Guangzhou is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Industrial Bank i.e., Industrial Bank and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Industrial Bank and Guangzhou Jointas
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.55 times more return on investment than Guangzhou Jointas. However, Industrial Bank Co is 1.81 times less risky than Guangzhou Jointas. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about -0.03 per unit of risk. If you would invest 1,633 in Industrial Bank Co on September 5, 2024 and sell it today you would earn a total of 212.00 from holding Industrial Bank Co or generate 12.98% 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. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Industrial Bank |
| Guangzhou Jointas |
Industrial Bank and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Guangzhou Jointas
The main advantage of trading using opposite Industrial Bank and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' 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 |
| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Rongsheng Petrochemical Co | Guangzhou Jointas vs. Shandong Gold Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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