Correlation Between Industrial and INDCOMMBK CHINA
Can any of the company-specific risk be diversified away by investing in both Industrial and INDCOMMBK CHINA 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 INDCOMMBK CHINA 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 INDCOMMBK CHINA ADR20, you can compare the effects of market volatilities on Industrial and INDCOMMBK CHINA 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 INDCOMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and INDCOMMBK CHINA.
Diversification Opportunities for Industrial and INDCOMMBK CHINA
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Industrial and INDCOMMBK is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and INDCOMMBK CHINA ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDCOMMBK CHINA ADR20 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 INDCOMMBK CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDCOMMBK CHINA ADR20 has no effect on the direction of Industrial i.e., Industrial and INDCOMMBK CHINA go up and down completely randomly.
Pair Corralation between Industrial and INDCOMMBK CHINA
Assuming the 90 days horizon Industrial and Commercial is expected to generate 1.61 times more return on investment than INDCOMMBK CHINA. However, Industrial is 1.61 times more volatile than INDCOMMBK CHINA ADR20. It trades about 0.14 of its potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about 0.14 per unit of risk. If you would invest 38.00 in Industrial and Commercial on November 2, 2024 and sell it today you would earn a total of 25.00 from holding Industrial and Commercial or generate 65.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Industrial and Commercial vs. INDCOMMBK CHINA ADR20
Performance |
| Timeline |
| Industrial and Commercial |
| INDCOMMBK CHINA ADR20 |
Industrial and INDCOMMBK CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and INDCOMMBK CHINA
The main advantage of trading using opposite Industrial and INDCOMMBK CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, INDCOMMBK CHINA 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 INDCOMMBK CHINA will offset losses from the drop in INDCOMMBK CHINA's long position.| Industrial vs. Adtalem Global Education | Industrial vs. CDL INVESTMENT | Industrial vs. Grand Canyon Education | Industrial vs. DIVERSIFIED ROYALTY |
| INDCOMMBK CHINA vs. Industrial and Commercial | INDCOMMBK CHINA vs. CHINA BANK ADR20 | INDCOMMBK CHINA vs. AGRICULTBK HADR25 YC | INDCOMMBK CHINA vs. BANK OCHINA H |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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