Correlation Between Industrial and CHINA FORTUNE
Can any of the company-specific risk be diversified away by investing in both Industrial and CHINA FORTUNE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Industrial and CHINA FORTUNE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial and Commercial and CHINA FORTUNE HLDGHD001, you can compare the effects of market volatilities on Industrial and CHINA FORTUNE 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 FORTUNE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and CHINA FORTUNE.
Diversification Opportunities for Industrial and CHINA FORTUNE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and CHINA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and CHINA FORTUNE HLDGHD001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA FORTUNE HLDGHD001 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 FORTUNE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA FORTUNE HLDGHD001 has no effect on the direction of Industrial i.e., Industrial and CHINA FORTUNE go up and down completely randomly.
Pair Corralation between Industrial and CHINA FORTUNE
Assuming the 90 days horizon Industrial and Commercial is expected to generate 0.44 times more return on investment than CHINA FORTUNE. However, Industrial and Commercial is 2.28 times less risky than CHINA FORTUNE. It trades about 0.01 of its potential returns per unit of risk. CHINA FORTUNE HLDGHD001 is currently generating about -0.05 per unit of risk. If you would invest 55.00 in Industrial and Commercial on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Industrial and Commercial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. CHINA FORTUNE HLDGHD001
Performance |
| Timeline |
| Industrial and Commercial |
| CHINA FORTUNE HLDGHD001 |
Industrial and CHINA FORTUNE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and CHINA FORTUNE
The main advantage of trading using opposite Industrial and CHINA FORTUNE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, CHINA FORTUNE 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 FORTUNE will offset losses from the drop in CHINA FORTUNE's long position.| Industrial vs. INDCOMMBK CHINA ADR20 | Industrial vs. CHINA BANK ADR20 | Industrial vs. AGRICULTBK HADR25 YC | Industrial vs. COMMONWBK AUSTRSPADRS |
| CHINA FORTUNE vs. Apple Inc | CHINA FORTUNE vs. Apple Inc | CHINA FORTUNE vs. Samsung Electronics Co | CHINA FORTUNE vs. Samsung Electronics Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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