Correlation Between Beijing Mainstreets and Zhejiang Dahua
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Beijing Mainstreets and Zhejiang Dahua 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 Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Zhejiang Dahua.
Diversification Opportunities for Beijing Mainstreets and Zhejiang Dahua
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Zhejiang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology 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 Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Zhejiang Dahua
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to under-perform the Zhejiang Dahua. In addition to that, Beijing Mainstreets is 1.66 times more volatile than Zhejiang Dahua Technology. It trades about -0.11 of its total potential returns per unit of risk. Zhejiang Dahua Technology is currently generating about 0.0 per unit of volatility. If you would invest 1,790 in Zhejiang Dahua Technology on September 12, 2024 and sell it today you would lose (87.00) from holding Zhejiang Dahua Technology or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Mainstreets Investment vs. Zhejiang Dahua Technology
Performance |
| Timeline |
| Beijing Mainstreets |
| Zhejiang Dahua Technology |
Beijing Mainstreets and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Mainstreets and Zhejiang Dahua
The main advantage of trading using opposite Beijing Mainstreets and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Zhejiang Dahua 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 Zhejiang Dahua will offset losses from the drop in Zhejiang Dahua's long position.| Beijing Mainstreets vs. Industrial and Commercial | Beijing Mainstreets vs. China Construction Bank | Beijing Mainstreets vs. Bank of China | Beijing Mainstreets vs. Agricultural Bank of |
| Zhejiang Dahua vs. Guangdong Wens Foodstuff | Zhejiang Dahua vs. Beijing Mainstreets Investment | Zhejiang Dahua vs. Shenzhen Topway Video | Zhejiang Dahua vs. Youyou Foods Co |
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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