Correlation Between Industrial and Bank of Changsha
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By analyzing existing cross correlation between Industrial and Commercial and Bank of Changsha, you can compare the effects of market volatilities on Industrial and Bank of Changsha 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 Bank of Changsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Bank of Changsha.
Diversification Opportunities for Industrial and Bank of Changsha
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Industrial and Bank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Bank of Changsha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Changsha 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 Bank of Changsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Changsha has no effect on the direction of Industrial i.e., Industrial and Bank of Changsha go up and down completely randomly.
Pair Corralation between Industrial and Bank of Changsha
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.76 times more return on investment than Bank of Changsha. However, Industrial and Commercial is 1.31 times less risky than Bank of Changsha. It trades about 0.09 of its potential returns per unit of risk. Bank of Changsha is currently generating about 0.05 per unit of risk. If you would invest 399.00 in Industrial and Commercial on September 13, 2024 and sell it today you would earn a total of 232.00 from holding Industrial and Commercial or generate 58.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Bank of Changsha
Performance |
| Timeline |
| Industrial and Commercial |
| Bank of Changsha |
Industrial and Bank of Changsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Bank of Changsha
The main advantage of trading using opposite Industrial and Bank of Changsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Bank of Changsha 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 Bank of Changsha will offset losses from the drop in Bank of Changsha's long position.| Industrial vs. Pengxin International Mining | Industrial vs. Qilu Bank Co | Industrial vs. Tibet Huayu Mining | Industrial vs. Chengtun Mining Group |
| Bank of Changsha vs. Hainan Airlines Co | Bank of Changsha vs. Shantui Construction Machinery | Bank of Changsha vs. Quectel Wireless Solutions | Bank of Changsha vs. Anhui Huilong Agricultural |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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