Correlation Between Beijing Mainstreets and Shanghai Material
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Shanghai Material Trading, you can compare the effects of market volatilities on Beijing Mainstreets and Shanghai Material 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 Shanghai Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Shanghai Material.
Diversification Opportunities for Beijing Mainstreets and Shanghai Material
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shanghai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Shanghai Material Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Material Trading 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 Shanghai Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Material Trading has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Shanghai Material go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Shanghai Material
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to generate 1.14 times more return on investment than Shanghai Material. However, Beijing Mainstreets is 1.14 times more volatile than Shanghai Material Trading. It trades about -0.01 of its potential returns per unit of risk. Shanghai Material Trading is currently generating about -0.29 per unit of risk. If you would invest 250.00 in Beijing Mainstreets Investment on October 12, 2024 and sell it today you would lose (6.00) from holding Beijing Mainstreets Investment or give up 2.4% 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. Shanghai Material Trading
Performance |
| Timeline |
| Beijing Mainstreets |
| Shanghai Material Trading |
Beijing Mainstreets and Shanghai Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Mainstreets and Shanghai Material
The main advantage of trading using opposite Beijing Mainstreets and Shanghai Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Shanghai Material 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 Shanghai Material will offset losses from the drop in Shanghai Material's long position.| Beijing Mainstreets vs. Huasi Agricultural Development | Beijing Mainstreets vs. Tianshui Huatian Technology | Beijing Mainstreets vs. Qijing Machinery | Beijing Mainstreets vs. Guangzhou KDT Machinery |
| Shanghai Material vs. China Minmetals Rare | Shanghai Material vs. Xiandai Investment Co | Shanghai Material vs. Guangdong Jingyi Metal | Shanghai Material vs. Beijing Mainstreets Investment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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