Correlation Between Xiwang Foodstuffs and Beken Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xiwang Foodstuffs and Beken Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xiwang Foodstuffs and Beken Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiwang Foodstuffs Co and Beken Corp, you can compare the effects of market volatilities on Xiwang Foodstuffs and Beken Corp 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 Xiwang Foodstuffs with a short position of Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiwang Foodstuffs and Beken Corp.

Diversification Opportunities for Xiwang Foodstuffs and Beken Corp

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Xiwang and Beken is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xiwang Foodstuffs Co and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp and Xiwang Foodstuffs 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 Xiwang Foodstuffs Co are associated (or correlated) with Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of Xiwang Foodstuffs i.e., Xiwang Foodstuffs and Beken Corp go up and down completely randomly.

Pair Corralation between Xiwang Foodstuffs and Beken Corp

Assuming the 90 days trading horizon Xiwang Foodstuffs is expected to generate 42.14 times less return on investment than Beken Corp. But when comparing it to its historical volatility, Xiwang Foodstuffs Co is 1.07 times less risky than Beken Corp. It trades about 0.0 of its potential returns per unit of risk. Beken Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,922  in Beken Corp on September 26, 2024 and sell it today you would earn a total of  173.00  from holding Beken Corp or generate 5.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Xiwang Foodstuffs Co  vs.  Beken Corp

 Performance 
       Timeline  
Xiwang Foodstuffs 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Xiwang Foodstuffs Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiwang Foodstuffs sustained solid returns over the last few months and may actually be approaching a breakup point.
Beken Corp 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Beken Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beken Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Xiwang Foodstuffs and Beken Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xiwang Foodstuffs and Beken Corp

The main advantage of trading using opposite Xiwang Foodstuffs and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiwang Foodstuffs position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.
The idea behind Xiwang Foodstuffs Co and Beken Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Commodity Directory
Find actively traded commodities issued by global exchanges