Correlation Between Industrial Bank and Zhongjing Food
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By analyzing existing cross correlation between Industrial Bank Co and Zhongjing Food Co, you can compare the effects of market volatilities on Industrial Bank and Zhongjing Food 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 Zhongjing Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Zhongjing Food.
Diversification Opportunities for Industrial Bank and Zhongjing Food
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and Zhongjing is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Zhongjing Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongjing Food 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 Zhongjing Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongjing Food has no effect on the direction of Industrial Bank i.e., Industrial Bank and Zhongjing Food go up and down completely randomly.
Pair Corralation between Industrial Bank and Zhongjing Food
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.86 times more return on investment than Zhongjing Food. However, Industrial Bank Co is 1.17 times less risky than Zhongjing Food. It trades about 0.33 of its potential returns per unit of risk. Zhongjing Food Co is currently generating about 0.06 per unit of risk. If you would invest 1,892 in Industrial Bank Co on November 4, 2024 and sell it today you would earn a total of 139.00 from holding Industrial Bank Co or generate 7.35% 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. Zhongjing Food Co
Performance |
| Timeline |
| Industrial Bank |
| Zhongjing Food |
Industrial Bank and Zhongjing Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Zhongjing Food
The main advantage of trading using opposite Industrial Bank and Zhongjing Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Zhongjing Food 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 Zhongjing Food will offset losses from the drop in Zhongjing Food's long position.| Industrial Bank vs. Shuhua Sports Co | Industrial Bank vs. Ping An Insurance | Industrial Bank vs. Hua Hong Semiconductor | Industrial Bank vs. Shenzhen AV Display Co |
| Zhongjing Food vs. Maxvision Technology Corp | Zhongjing Food vs. Strait Innovation Internet | Zhongjing Food vs. ROPEOK Technology Group | Zhongjing Food vs. Tianjin Hi Tech Development |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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