Correlation Between Industrial Bank and Harvest Fund

Can any of the company-specific risk be diversified away by investing in both Industrial Bank and Harvest Fund 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 Harvest Fund 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 Harvest Fund Management, you can compare the effects of market volatilities on Industrial Bank and Harvest Fund 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 Harvest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Harvest Fund.

Diversification Opportunities for Industrial Bank and Harvest Fund

0.84

Correlation Coefficient

Industrial Bank  Harvest Fund

Very poor diversification

The 3 months correlation between Industrial and Harvest is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank Co and Harvest Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Fund Management 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 Harvest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Fund Management has no effect on the direction of Industrial Bank i.e., Industrial Bank and Harvest Fund go up and down completely randomly.

Pair Corralation between Industrial Bank and Harvest Fund

Assuming the 90 days trading horizon Industrial Bank is expected to generate 2.19 times less return on investment than Harvest Fund. But when comparing it to its historical volatility, Industrial Bank Co is 1.13 times less risky than Harvest Fund. It trades about 0.16 of its potential returns per unit of risk. Harvest Fund Management is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  274.00  in Harvest Fund Management on December 26, 2024 and sell it today you would earn a total of  77.00  from holding Harvest Fund Management or generate 28.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Industrial Bank Co  vs.  Harvest Fund Management

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.

Harvest Fund Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Fund Management are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harvest Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industrial Bank and Harvest Fund

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

The idea behind Industrial Bank Co and Harvest Fund Management 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.