Correlation Between Industrial Bank and Shanghai Lingyun
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By analyzing existing cross correlation between Industrial Bank Co and Shanghai Lingyun Industries, you can compare the effects of market volatilities on Industrial Bank and Shanghai Lingyun 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 Shanghai Lingyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Shanghai Lingyun.
Diversification Opportunities for Industrial Bank and Shanghai Lingyun
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Shanghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Shanghai Lingyun Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lingyun Ind 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 Shanghai Lingyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lingyun Ind has no effect on the direction of Industrial Bank i.e., Industrial Bank and Shanghai Lingyun go up and down completely randomly.
Pair Corralation between Industrial Bank and Shanghai Lingyun
Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.36 times more return on investment than Shanghai Lingyun. However, Industrial Bank Co is 2.78 times less risky than Shanghai Lingyun. It trades about 0.08 of its potential returns per unit of risk. Shanghai Lingyun Industries is currently generating about 0.03 per unit of risk. If you would invest 1,440 in Industrial Bank Co on September 14, 2024 and sell it today you would earn a total of 435.00 from holding Industrial Bank Co or generate 30.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank Co vs. Shanghai Lingyun Industries
Performance |
| Timeline |
| Industrial Bank |
| Shanghai Lingyun Ind |
Industrial Bank and Shanghai Lingyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Shanghai Lingyun
The main advantage of trading using opposite Industrial Bank and Shanghai Lingyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Shanghai Lingyun 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 Shanghai Lingyun will offset losses from the drop in Shanghai Lingyun's long position.| Industrial Bank vs. Industrial and Commercial | Industrial Bank vs. China Construction Bank | Industrial Bank vs. Bank of China | Industrial Bank vs. Agricultural Bank of |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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