Correlation Between Nanhua Bio and Beijing New
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By analyzing existing cross correlation between Nanhua Bio Medicine and Beijing New Building, you can compare the effects of market volatilities on Nanhua Bio and Beijing New 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 Nanhua Bio with a short position of Beijing New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Beijing New.
Diversification Opportunities for Nanhua Bio and Beijing New
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanhua and Beijing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Beijing New Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing New Building and Nanhua Bio 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 Nanhua Bio Medicine are associated (or correlated) with Beijing New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing New Building has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Beijing New go up and down completely randomly.
Pair Corralation between Nanhua Bio and Beijing New
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to generate 1.64 times more return on investment than Beijing New. However, Nanhua Bio is 1.64 times more volatile than Beijing New Building. It trades about 0.1 of its potential returns per unit of risk. Beijing New Building is currently generating about -0.02 per unit of risk. If you would invest 675.00 in Nanhua Bio Medicine on September 1, 2024 and sell it today you would earn a total of 355.00 from holding Nanhua Bio Medicine or generate 52.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Beijing New Building
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Beijing New Building |
Nanhua Bio and Beijing New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Beijing New
The main advantage of trading using opposite Nanhua Bio and Beijing New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Beijing New 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 Beijing New will offset losses from the drop in Beijing New's long position.| Nanhua Bio vs. Beijing Bewinner Communications | Nanhua Bio vs. Yangmei Chemical Co | Nanhua Bio vs. Liuzhou Chemical Industry | Nanhua Bio vs. Anhui Huaertai Chemical |
| Beijing New vs. Industrial and Commercial | Beijing New vs. Agricultural Bank of | Beijing New vs. China Construction Bank | Beijing New vs. Bank of China |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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