Correlation Between Industrial Bank and Citic Offshore

Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Citic Offshore 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 Bank and Citic Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Industrial Bank Co and Citic Offshore Helicopter, you can compare the effects of market volatilities on Industrial Bank and Citic Offshore 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 Bank with a short position of Citic Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Citic Offshore.

Diversification Opportunities for Industrial Bank and Citic Offshore

0.36

Correlation Coefficient

Industrial Bank  Citic Offshore

Weak diversification

The 3 months correlation between Industrial and Citic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Citic Offshore Helicopter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Offshore Helicopter and Industrial Bank 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 Bank Co are associated (or correlated) with Citic Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Offshore Helicopter has no effect on the direction of Industrial Bank i.e., Industrial Bank and Citic Offshore go up and down completely randomly.

Pair Corralation between Industrial Bank and Citic Offshore

Assuming the 90 days trading horizon Industrial Bank Co is expected to generate 0.42 times more return on investment than Citic Offshore. However, Industrial Bank Co is 2.36 times less risky than Citic Offshore. It trades about 0.15 of its potential returns per unit of risk. Citic Offshore Helicopter is currently generating about -0.05 per unit of risk. If you would invest  1,935  in Industrial Bank Co on December 27, 2024 and sell it today you would earn a total of  215.00  from holding Industrial Bank Co or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Industrial Bank Co  vs.  Citic Offshore Helicopter

Industrial Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Bank Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Industrial Bank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Citic Offshore Helicopter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citic Offshore Helicopter has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Industrial Bank and Citic Offshore

The main advantage of trading using opposite Industrial Bank and Citic Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, Citic Offshore 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 Citic Offshore will offset losses from the drop in Citic Offshore's long position.

The idea behind Industrial Bank Co and Citic Offshore Helicopter pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.