Correlation Between Industrial and China Express
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By analyzing existing cross correlation between Industrial and Commercial and China Express Airlines, you can compare the effects of market volatilities on Industrial and China Express 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 China Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and China Express.
Diversification Opportunities for Industrial and China Express
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and China Express Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Express Airlines 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 China Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Express Airlines has no effect on the direction of Industrial i.e., Industrial and China Express go up and down completely randomly.
Pair Corralation between Industrial and China Express
Assuming the 90 days trading horizon Industrial is expected to generate 3.32 times less return on investment than China Express. But when comparing it to its historical volatility, Industrial and Commercial is 2.24 times less risky than China Express. It trades about 0.13 of its potential returns per unit of risk. China Express Airlines is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 545.00 in China Express Airlines on September 24, 2024 and sell it today you would earn a total of 229.00 from holding China Express Airlines or generate 42.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Industrial and Commercial vs. China Express Airlines
Performance |
Timeline |
Industrial and Commercial |
China Express Airlines |
Industrial and China Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industrial and China Express
The main advantage of trading using opposite Industrial and China Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, China Express 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 China Express will offset losses from the drop in China Express' long position.Industrial vs. Bengang Steel Plates | Industrial vs. Penyao Environmental Protection | Industrial vs. BCEG Environmental Remediation | Industrial vs. Anhui Deli Household |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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