Correlation Between Beijing Yanjing and Guangdong Brandmax
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Guangdong Brandmax Marketing, you can compare the effects of market volatilities on Beijing Yanjing and Guangdong Brandmax 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 Guangdong Brandmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Guangdong Brandmax.
Diversification Opportunities for Beijing Yanjing and Guangdong Brandmax
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Guangdong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Guangdong Brandmax Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Brandmax 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 Guangdong Brandmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Brandmax has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Guangdong Brandmax go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Guangdong Brandmax
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to under-perform the Guangdong Brandmax. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Yanjing Brewery is 2.18 times less risky than Guangdong Brandmax. The stock trades about -0.21 of its potential returns per unit of risk. The Guangdong Brandmax Marketing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 859.00 in Guangdong Brandmax Marketing on August 24, 2024 and sell it today you would earn a total of 48.00 from holding Guangdong Brandmax Marketing or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. Guangdong Brandmax Marketing
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| Guangdong Brandmax |
Beijing Yanjing and Guangdong Brandmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Guangdong Brandmax
The main advantage of trading using opposite Beijing Yanjing and Guangdong Brandmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Guangdong Brandmax 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 Guangdong Brandmax will offset losses from the drop in Guangdong Brandmax's long position.| Beijing Yanjing vs. Focus Media Information | Beijing Yanjing vs. Longjian Road Bridge | Beijing Yanjing vs. Zhongshan Broad Ocean Motor | Beijing Yanjing vs. China Marine Information |
| Guangdong Brandmax vs. Industrial and Commercial | Guangdong Brandmax vs. Agricultural Bank of | Guangdong Brandmax vs. China Construction Bank | Guangdong Brandmax vs. Bank of China |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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