Correlation Between Industrial Bank and New China
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By analyzing existing cross correlation between Industrial Bank Co and New China Life, you can compare the effects of market volatilities on Industrial Bank and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and New China.
Diversification Opportunities for Industrial Bank and New China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and New is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Industrial Bank i.e., Industrial Bank and New China go up and down completely randomly.
Pair Corralation between Industrial Bank and New China
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.54 times more return on investment than New China. However, Industrial Bank Co is 1.85 times less risky than New China. It trades about 0.29 of its potential returns per unit of risk. New China Life is currently generating about -0.26 per unit of risk. If you would invest 1,822 in Industrial Bank Co on October 16, 2024 and sell it today you would earn a total of 107.00 from holding Industrial Bank Co or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. New China Life
Performance |
| Timeline |
| Industrial Bank |
| New China Life |
Industrial Bank and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and New China
The main advantage of trading using opposite Industrial Bank and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Industrial Bank vs. China Publishing Media | Industrial Bank vs. Zhejiang Qianjiang Motorcycle | Industrial Bank vs. Haima Automobile Group | Industrial Bank vs. Anhui Jianghuai Automobile |
| New China vs. Suzhou Douson Drilling | New China vs. GRG Banking Equipment | New China vs. Agricultural Bank of | New China vs. Industrial Bank Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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