Correlation Between New China and Industrial Bank
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By analyzing existing cross correlation between New China Life and Industrial Bank Co, you can compare the effects of market volatilities on New China and Industrial Bank 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 New China with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Industrial Bank.
Diversification Opportunities for New China and Industrial Bank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Industrial is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and New China 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 New China Life are associated (or correlated) with Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of New China i.e., New China and Industrial Bank go up and down completely randomly.
Pair Corralation between New China and Industrial Bank
Assuming the 90 days trading horizon New China Life is expected to generate 2.61 times more return on investment than Industrial Bank. However, New China is 2.61 times more volatile than Industrial Bank Co. It trades about -0.05 of its potential returns per unit of risk. Industrial Bank Co is currently generating about -0.23 per unit of risk. If you would invest 4,865 in New China Life on August 28, 2024 and sell it today you would lose (234.00) from holding New China Life or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Industrial Bank Co
Performance |
| Timeline |
| New China Life |
| Industrial Bank |
New China and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Industrial Bank
The main advantage of trading using opposite New China and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| New China vs. Hubei Dinglong Chemical | New China vs. Guizhou Chanhen Chemical | New China vs. MayAir Technology Co | New China vs. Vanfund Urban Investment |
| Industrial Bank vs. Sino Platinum Metals Co | Industrial Bank vs. Shandong Hongchuang Aluminum | Industrial Bank vs. Rising Nonferrous Metals | Industrial Bank vs. Harbin Air Conditioning |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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