Correlation Between Beijing Yanjing and TCL Corp
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By analyzing existing cross correlation between Beijing Yanjing Brewery and TCL Corp, you can compare the effects of market volatilities on Beijing Yanjing and TCL 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 Beijing Yanjing with a short position of TCL Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and TCL Corp.
Diversification Opportunities for Beijing Yanjing and TCL Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and TCL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and TCL Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Corp and Beijing Yanjing 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 Yanjing Brewery are associated (or correlated) with TCL Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Corp has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and TCL Corp go up and down completely randomly.
Pair Corralation between Beijing Yanjing and TCL Corp
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 0.51 times more return on investment than TCL Corp. However, Beijing Yanjing Brewery is 1.95 times less risky than TCL Corp. It trades about -0.02 of its potential returns per unit of risk. TCL Corp is currently generating about -0.18 per unit of risk. If you would invest 1,040 in Beijing Yanjing Brewery on September 12, 2024 and sell it today you would lose (7.00) from holding Beijing Yanjing Brewery or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. TCL Corp
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| TCL Corp |
Beijing Yanjing and TCL Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and TCL Corp
The main advantage of trading using opposite Beijing Yanjing and TCL Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, TCL 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 TCL Corp will offset losses from the drop in TCL Corp's long position.| Beijing Yanjing vs. China Petroleum Chemical | Beijing Yanjing vs. PetroChina Co Ltd | Beijing Yanjing vs. China State Construction | Beijing Yanjing vs. China Railway Group |
| TCL Corp vs. Lutian Machinery Co | TCL Corp vs. PetroChina Co Ltd | TCL Corp vs. Bank of China | TCL Corp vs. Gansu Jiu Steel |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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