Correlation Between Beijing Yanjing and Jiangyin Jianghua
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Jiangyin Jianghua Microelectronics, you can compare the effects of market volatilities on Beijing Yanjing and Jiangyin Jianghua 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 Jiangyin Jianghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Jiangyin Jianghua.
Diversification Opportunities for Beijing Yanjing and Jiangyin Jianghua
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Jiangyin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Jiangyin Jianghua Microelectro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangyin Jianghua 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 Jiangyin Jianghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangyin Jianghua has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Jiangyin Jianghua go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Jiangyin Jianghua
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 0.38 times more return on investment than Jiangyin Jianghua. However, Beijing Yanjing Brewery is 2.61 times less risky than Jiangyin Jianghua. It trades about 0.06 of its potential returns per unit of risk. Jiangyin Jianghua Microelectronics is currently generating about 0.01 per unit of risk. If you would invest 1,077 in Beijing Yanjing Brewery on November 7, 2024 and sell it today you would earn a total of 54.00 from holding Beijing Yanjing Brewery or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Yanjing Brewery vs. Jiangyin Jianghua Microelectro
Performance |
| Timeline |
| Beijing Yanjing Brewery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Jiangyin Jianghua |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Beijing Yanjing and Jiangyin Jianghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and Jiangyin Jianghua
The main advantage of trading using opposite Beijing Yanjing and Jiangyin Jianghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Jiangyin Jianghua 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 Jiangyin Jianghua will offset losses from the drop in Jiangyin Jianghua's long position.The idea behind Beijing Yanjing Brewery and Jiangyin Jianghua Microelectronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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