Correlation Between Industrial and IND+COMMBK CHINA
Can any of the company-specific risk be diversified away by investing in both Industrial and IND+COMMBK 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 IND+COMMBK 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 IND+COMMBK 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 IND+COMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and IND+COMMBK CHINA.
Diversification Opportunities for Industrial and IND+COMMBK CHINA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Industrial and IND+COMMBK is 0.93. 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 IND+COMMBK 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 IND+COMMBK CHINA go up and down completely randomly.
Pair Corralation between Industrial and IND+COMMBK CHINA
Assuming the 90 days horizon Industrial is expected to generate 1.53 times less return on investment than IND+COMMBK CHINA. In addition to that, Industrial is 1.05 times more volatile than INDCOMMBK CHINA ADR20. It trades about 0.03 of its total potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about 0.04 per unit of volatility. If you would invest 744.00 in INDCOMMBK CHINA ADR20 on August 28, 2024 and sell it today you would earn a total of 356.00 from holding INDCOMMBK CHINA ADR20 or generate 47.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. INDCOMMBK CHINA ADR20
Performance |
| Timeline |
| Industrial and Commercial |
| INDCOMMBK CHINA ADR20 |
Industrial and IND+COMMBK CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and IND+COMMBK CHINA
The main advantage of trading using opposite Industrial and IND+COMMBK CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, IND+COMMBK 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 IND+COMMBK CHINA will offset losses from the drop in IND+COMMBK CHINA's long position.| Industrial vs. Coor Service Management | Industrial vs. SIDETRADE EO 1 | Industrial vs. Globe Trade Centre | Industrial vs. FAST RETAIL ADR |
| IND+COMMBK CHINA vs. Data3 Limited | IND+COMMBK CHINA vs. Datang International Power | IND+COMMBK CHINA vs. Information Services International Dentsu | IND+COMMBK CHINA vs. AM EAGLE OUTFITTERS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |