Correlation Between Industrial Bank and Dongfeng Automobile
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By analyzing existing cross correlation between Industrial Bank Co and Dongfeng Automobile Co, you can compare the effects of market volatilities on Industrial Bank and Dongfeng Automobile 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 Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Dongfeng Automobile.
Diversification Opportunities for Industrial Bank and Dongfeng Automobile
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Dongfeng is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile 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 Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Industrial Bank i.e., Industrial Bank and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Industrial Bank and Dongfeng Automobile
Assuming the 90 days trading horizon Industrial Bank is expected to generate 1.08 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, Industrial Bank Co is 2.16 times less risky than Dongfeng Automobile. It trades about 0.04 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 599.00 in Dongfeng Automobile Co on October 31, 2024 and sell it today you would earn a total of 66.00 from holding Dongfeng Automobile Co or generate 11.02% 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. Dongfeng Automobile Co
Performance |
| Timeline |
| Industrial Bank |
| Dongfeng Automobile |
Industrial Bank and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Dongfeng Automobile
The main advantage of trading using opposite Industrial Bank and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| Industrial Bank vs. Wintao Communications Co | Industrial Bank vs. Xizi Clean Energy | Industrial Bank vs. Dongfeng Automobile Co | Industrial Bank vs. Songz Automobile Air |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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