Correlation Between Digital China and Beijing Lier
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By analyzing existing cross correlation between Digital China Information and Beijing Lier High, you can compare the effects of market volatilities on Digital China and Beijing Lier 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 Digital China with a short position of Beijing Lier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Beijing Lier.
Diversification Opportunities for Digital China and Beijing Lier
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Digital and Beijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Beijing Lier High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lier High and Digital China 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 Digital China Information are associated (or correlated) with Beijing Lier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lier High has no effect on the direction of Digital China i.e., Digital China and Beijing Lier go up and down completely randomly.
Pair Corralation between Digital China and Beijing Lier
Assuming the 90 days trading horizon Digital China is expected to generate 2.61 times less return on investment than Beijing Lier. In addition to that, Digital China is 1.22 times more volatile than Beijing Lier High. It trades about 0.02 of its total potential returns per unit of risk. Beijing Lier High is currently generating about 0.07 per unit of volatility. If you would invest 372.00 in Beijing Lier High on September 15, 2024 and sell it today you would earn a total of 166.00 from holding Beijing Lier High or generate 44.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Digital China Information vs. Beijing Lier High
Performance |
| Timeline |
| Digital China Information |
| Beijing Lier High |
Digital China and Beijing Lier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Beijing Lier
The main advantage of trading using opposite Digital China and Beijing Lier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Beijing Lier 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 Lier will offset losses from the drop in Beijing Lier's long position.| Digital China vs. China Petroleum Chemical | Digital China vs. PetroChina Co Ltd | Digital China vs. China State Construction | Digital China vs. China Railway Group |
| Beijing Lier vs. Emdoor Information Co | Beijing Lier vs. Blue Sail Medical | Beijing Lier vs. Xian International Medical | Beijing Lier vs. Digital China Information |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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