Correlation Between Beijing Mainstreets and Xinya Electronic
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Xinya Electronic Co, you can compare the effects of market volatilities on Beijing Mainstreets and Xinya Electronic 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 Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Xinya Electronic.
Diversification Opportunities for Beijing Mainstreets and Xinya Electronic
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijing and Xinya is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic 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 Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Xinya Electronic go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Xinya Electronic
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to under-perform the Xinya Electronic. In addition to that, Beijing Mainstreets is 1.0 times more volatile than Xinya Electronic Co. It trades about -0.03 of its total potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.09 per unit of volatility. If you would invest 964.00 in Xinya Electronic Co on November 7, 2024 and sell it today you would earn a total of 831.00 from holding Xinya Electronic Co or generate 86.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Mainstreets Investment vs. Xinya Electronic Co
Performance |
| Timeline |
| Beijing Mainstreets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xinya Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Beijing Mainstreets and Xinya Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Mainstreets and Xinya Electronic
The main advantage of trading using opposite Beijing Mainstreets and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.The idea behind Beijing Mainstreets Investment and Xinya Electronic Co 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.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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