Correlation Between Industrial and Xiamen Bank
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By analyzing existing cross correlation between Industrial and Commercial and Xiamen Bank Co, you can compare the effects of market volatilities on Industrial and Xiamen 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 Industrial with a short position of Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Xiamen Bank.
Diversification Opportunities for Industrial and Xiamen Bank
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Xiamen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Industrial i.e., Industrial and Xiamen Bank go up and down completely randomly.
Pair Corralation between Industrial and Xiamen Bank
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.87 times more return on investment than Xiamen Bank. However, Industrial and Commercial is 1.15 times less risky than Xiamen Bank. It trades about 0.09 of its potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.03 per unit of risk. If you would invest 399.00 in Industrial and Commercial on September 5, 2024 and sell it today you would earn a total of 222.00 from holding Industrial and Commercial or generate 55.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Xiamen Bank Co
Performance |
| Timeline |
| Industrial and Commercial |
| Xiamen Bank |
Industrial and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Xiamen Bank
The main advantage of trading using opposite Industrial and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Xiamen 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| Industrial vs. Sichuan Hebang Biotechnology | Industrial vs. Bloomage Biotechnology Corp | Industrial vs. Liaoning Chengda Biotechnology | Industrial vs. BCEG Environmental Remediation |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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