Correlation Between Beijing Yanjing and Guangzhou Haozhi
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Guangzhou Haozhi Industrial, you can compare the effects of market volatilities on Beijing Yanjing and Guangzhou Haozhi 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 Guangzhou Haozhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Guangzhou Haozhi.
Diversification Opportunities for Beijing Yanjing and Guangzhou Haozhi
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Guangzhou is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind 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 Guangzhou Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Guangzhou Haozhi go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Guangzhou Haozhi
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to under-perform the Guangzhou Haozhi. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Yanjing Brewery is 2.7 times less risky than Guangzhou Haozhi. The stock trades about -0.06 of its potential returns per unit of risk. The Guangzhou Haozhi Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,082 in Guangzhou Haozhi Industrial on October 28, 2024 and sell it today you would earn a total of 249.00 from holding Guangzhou Haozhi Industrial or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. Guangzhou Haozhi Industrial
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| Guangzhou Haozhi Ind |
Beijing Yanjing and Guangzhou Haozhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Guangzhou Haozhi
The main advantage of trading using opposite Beijing Yanjing and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Guangzhou Haozhi 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 Guangzhou Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.| Beijing Yanjing vs. Agricultural Bank of | Beijing Yanjing vs. Industrial and Commercial | Beijing Yanjing vs. Bank of China | Beijing Yanjing vs. China Construction Bank |
| Guangzhou Haozhi vs. Vats Liquor Chain | Guangzhou Haozhi vs. Dongfeng Automobile Co | Guangzhou Haozhi vs. Duzhe Publishing Media | Guangzhou Haozhi vs. Changjiang Publishing Media |
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 Correlations module to find global opportunities by holding instruments from different markets.
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