Correlation Between Beijing Yanjing and Changjiang Jinggong
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Beijing Yanjing and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Changjiang Jinggong.
Diversification Opportunities for Beijing Yanjing and Changjiang Jinggong
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Changjiang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Changjiang Jinggong
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 1.07 times more return on investment than Changjiang Jinggong. However, Beijing Yanjing is 1.07 times more volatile than Changjiang Jinggong Steel. It trades about 0.06 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about 0.01 per unit of risk. If you would invest 1,021 in Beijing Yanjing Brewery on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Beijing Yanjing Brewery or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| Changjiang Jinggong Steel |
Beijing Yanjing and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Changjiang Jinggong
The main advantage of trading using opposite Beijing Yanjing and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Beijing Yanjing vs. Jiangsu Xinri E Vehicle | Beijing Yanjing vs. Offshore Oil Engineering | Beijing Yanjing vs. Beijing Mainstreets Investment | Beijing Yanjing vs. CIMC Vehicles Co |
| Changjiang Jinggong vs. Guangzhou Jointas Chemical | Changjiang Jinggong vs. China National Software | Changjiang Jinggong vs. Dhc Software Co | Changjiang Jinggong vs. Bomesc Offshore Engineering |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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