Correlation Between Beijing Mainstreets and Shenzhen Noposion
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Beijing Mainstreets and Shenzhen Noposion 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 Beijing Mainstreets with a short position of Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Shenzhen Noposion.
Diversification Opportunities for Beijing Mainstreets and Shenzhen Noposion
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shenzhen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion and Beijing Mainstreets 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 Beijing Mainstreets Investment are associated (or correlated) with Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Shenzhen Noposion
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to generate 1.65 times more return on investment than Shenzhen Noposion. However, Beijing Mainstreets is 1.65 times more volatile than Shenzhen Noposion Agrochemicals. It trades about 0.13 of its potential returns per unit of risk. Shenzhen Noposion Agrochemicals is currently generating about -0.02 per unit of risk. If you would invest 224.00 in Beijing Mainstreets Investment on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Beijing Mainstreets Investment or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Mainstreets Investment vs. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| Beijing Mainstreets |
| Shenzhen Noposion |
Beijing Mainstreets and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Mainstreets and Shenzhen Noposion
The main advantage of trading using opposite Beijing Mainstreets and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion's long position.The idea behind Beijing Mainstreets Investment and Shenzhen Noposion Agrochemicals 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.
| Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining | Shenzhen Noposion vs. Rongsheng Petrochemical Co | Shenzhen Noposion vs. Inner Mongolia BaoTou |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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