Correlation Between Industrial Bank and Allied Machinery
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By analyzing existing cross correlation between Industrial Bank Co and Allied Machinery Co, you can compare the effects of market volatilities on Industrial Bank and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Allied Machinery.
Diversification Opportunities for Industrial Bank and Allied Machinery
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Allied is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Industrial Bank i.e., Industrial Bank and Allied Machinery go up and down completely randomly.
Pair Corralation between Industrial Bank and Allied Machinery
Assuming the 90 days trading horizon Industrial Bank Co is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Industrial Bank Co is 2.01 times less risky than Allied Machinery. The stock trades about -0.04 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,514 in Allied Machinery Co on September 1, 2024 and sell it today you would earn a total of 119.00 from holding Allied Machinery Co or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Allied Machinery Co
Performance |
| Timeline |
| Industrial Bank |
| Allied Machinery |
Industrial Bank and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Allied Machinery
The main advantage of trading using opposite Industrial Bank and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's 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 |
| Allied Machinery vs. New China Life | Allied Machinery vs. Ming Yang Smart | Allied Machinery vs. 159681 | Allied Machinery vs. 159005 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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