Correlation Between Beijing Mainstreets and Dalian Thermal
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Dalian Thermal Power, you can compare the effects of market volatilities on Beijing Mainstreets and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Dalian Thermal.
Diversification Opportunities for Beijing Mainstreets and Dalian Thermal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Dalian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Dalian Thermal go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Dalian Thermal
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to under-perform the Dalian Thermal. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Mainstreets Investment is 1.02 times less risky than Dalian Thermal. The stock trades about -0.1 of its potential returns per unit of risk. The Dalian Thermal Power is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 824.00 in Dalian Thermal Power on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Dalian Thermal Power or generate 1.46% 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. Dalian Thermal Power
Performance |
| Timeline |
| Beijing Mainstreets |
| Dalian Thermal Power |
Beijing Mainstreets and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Mainstreets and Dalian Thermal
The main advantage of trading using opposite Beijing Mainstreets and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Beijing Mainstreets vs. China Life Insurance | Beijing Mainstreets vs. Cinda Securities Co | Beijing Mainstreets vs. Piotech Inc A | Beijing Mainstreets vs. Dongxing Sec Co |
| Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. China Mobile Limited | Dalian Thermal vs. CNOOC Limited | Dalian Thermal vs. Ping An Insurance |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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