Correlation Between Industrial and Bank of Qingdao
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By analyzing existing cross correlation between Industrial and Commercial and Bank of Qingdao, you can compare the effects of market volatilities on Industrial and Bank of Qingdao 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 Bank of Qingdao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Bank of Qingdao.
Diversification Opportunities for Industrial and Bank of Qingdao
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Bank is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Bank of Qingdao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Qingdao 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 Bank of Qingdao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Qingdao has no effect on the direction of Industrial i.e., Industrial and Bank of Qingdao go up and down completely randomly.
Pair Corralation between Industrial and Bank of Qingdao
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 1.06 times more return on investment than Bank of Qingdao. However, Industrial is 1.06 times more volatile than Bank of Qingdao. It trades about 0.42 of its potential returns per unit of risk. Bank of Qingdao is currently generating about 0.23 per unit of risk. If you would invest 607.00 in Industrial and Commercial on September 25, 2024 and sell it today you would earn a total of 63.00 from holding Industrial and Commercial or generate 10.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Industrial and Commercial vs. Bank of Qingdao
Performance |
Timeline |
Industrial and Commercial |
Bank of Qingdao |
Industrial and Bank of Qingdao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industrial and Bank of Qingdao
The main advantage of trading using opposite Industrial and Bank of Qingdao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Bank of Qingdao 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 Bank of Qingdao will offset losses from the drop in Bank of Qingdao's long position.Industrial vs. Ningxia Younglight Chemicals | Industrial vs. Sanbo Hospital Management | Industrial vs. China Asset Management | Industrial vs. Huaxia Fund Management |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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