Correlation Between Industrial and China World
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By analyzing existing cross correlation between Industrial and Commercial and China World Trade, you can compare the effects of market volatilities on Industrial and China World 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 China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and China World.
Diversification Opportunities for Industrial and China World
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Industrial and China is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade 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 China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Industrial i.e., Industrial and China World go up and down completely randomly.
Pair Corralation between Industrial and China World
Assuming the 90 days trading horizon Industrial and Commercial is expected to under-perform the China World. But the stock apears to be less risky and, when comparing its historical volatility, Industrial and Commercial is 1.33 times less risky than China World. The stock trades about 0.0 of its potential returns per unit of risk. The China World Trade is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,124 in China World Trade on August 29, 2024 and sell it today you would earn a total of 111.00 from holding China World Trade or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. China World Trade
Performance |
| Timeline |
| Industrial and Commercial |
| China World Trade |
Industrial and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and China World
The main advantage of trading using opposite Industrial and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, China World 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 China World will offset losses from the drop in China World's long position.| Industrial vs. Sinofibers Technology Co | Industrial vs. Saurer Intelligent Technology | Industrial vs. Sinocelltech Group | Industrial vs. Dhc Software Co |
| China World vs. Cambricon Technologies Corp | China World vs. Empyrean Technology Co | China World vs. Kuang Chi Technologies | China World vs. Gansu Jiu Steel |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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