Correlation Between Industrial and Beijing Zhong
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By analyzing existing cross correlation between Industrial and Commercial and Beijing Zhong Ke, you can compare the effects of market volatilities on Industrial and Beijing Zhong 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 with a short position of Beijing Zhong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Beijing Zhong.
Diversification Opportunities for Industrial and Beijing Zhong
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Beijing is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Beijing Zhong Ke in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Zhong Ke and Industrial 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 and Commercial are associated (or correlated) with Beijing Zhong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Zhong Ke has no effect on the direction of Industrial i.e., Industrial and Beijing Zhong go up and down completely randomly.
Pair Corralation between Industrial and Beijing Zhong
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.5 times more return on investment than Beijing Zhong. However, Industrial and Commercial is 1.98 times less risky than Beijing Zhong. It trades about 0.28 of its potential returns per unit of risk. Beijing Zhong Ke is currently generating about -0.14 per unit of risk. If you would invest 604.00 in Industrial and Commercial on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Industrial and Commercial or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Beijing Zhong Ke
Performance |
| Timeline |
| Industrial and Commercial |
| Beijing Zhong Ke |
Industrial and Beijing Zhong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Beijing Zhong
The main advantage of trading using opposite Industrial and Beijing Zhong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Beijing Zhong 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 Beijing Zhong will offset losses from the drop in Beijing Zhong's long position.| Industrial vs. Allmed Medical Products | Industrial vs. Blue Sail Medical | Industrial vs. Yingde Greatchem Chemicals | Industrial vs. Zhongzhu Medical Holdings |
| Beijing Zhong vs. Industrial and Commercial | Beijing Zhong vs. Agricultural Bank of | Beijing Zhong vs. China Construction Bank | Beijing Zhong vs. Bank of China |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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