Correlation Between Industrial Bank and Bomin Electronics
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By analyzing existing cross correlation between Industrial Bank Co and Bomin Electronics Co, you can compare the effects of market volatilities on Industrial Bank and Bomin Electronics 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 Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Bomin Electronics.
Diversification Opportunities for Industrial Bank and Bomin Electronics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Bomin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics 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 Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Industrial Bank i.e., Industrial Bank and Bomin Electronics go up and down completely randomly.
Pair Corralation between Industrial Bank and Bomin Electronics
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.42 times more return on investment than Bomin Electronics. However, Industrial Bank Co is 2.36 times less risky than Bomin Electronics. It trades about -0.04 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 1,828 in Industrial Bank Co on September 1, 2024 and sell it today you would lose (23.00) from holding Industrial Bank Co or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Bomin Electronics Co
Performance |
| Timeline |
| Industrial Bank |
| Bomin Electronics |
Industrial Bank and Bomin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Bomin Electronics
The main advantage of trading using opposite Industrial Bank and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.| Industrial Bank vs. Kweichow Moutai Co | Industrial Bank vs. Shenzhen Mindray Bio Medical | Industrial Bank vs. Jiangsu Pacific Quartz | Industrial Bank vs. G bits Network Technology |
| Bomin Electronics vs. Cultural Investment Holdings | Bomin Electronics vs. Gome Telecom Equipment | Bomin Electronics vs. Bus Online Co | Bomin Electronics vs. Zotye Automobile 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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