Correlation Between Beijing Yanjing and Dongfeng Automobile
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Dongfeng Automobile Co, you can compare the effects of market volatilities on Beijing Yanjing and Dongfeng Automobile 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 Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Dongfeng Automobile.
Diversification Opportunities for Beijing Yanjing and Dongfeng Automobile
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Dongfeng is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile 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 Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Dongfeng Automobile
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 0.46 times more return on investment than Dongfeng Automobile. However, Beijing Yanjing Brewery is 2.2 times less risky than Dongfeng Automobile. It trades about 0.13 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.07 per unit of risk. If you would invest 1,039 in Beijing Yanjing Brewery on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Beijing Yanjing Brewery or generate 4.14% 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. Dongfeng Automobile Co
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| Dongfeng Automobile |
Beijing Yanjing and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Dongfeng Automobile
The main advantage of trading using opposite Beijing Yanjing and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| Beijing Yanjing vs. Industrial and Commercial | Beijing Yanjing vs. Kweichow Moutai Co | Beijing Yanjing vs. Agricultural Bank of | Beijing Yanjing vs. China Mobile Limited |
| Dongfeng Automobile vs. Guosheng Financial Holding | Dongfeng Automobile vs. Peoples Insurance of | Dongfeng Automobile vs. Zhongrun Resources Investment | Dongfeng Automobile vs. Shenwu Energy Saving |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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