Correlation Between Beijing Yanjing and China Molybdenum
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By analyzing existing cross correlation between Beijing Yanjing Brewery and China Molybdenum Co, you can compare the effects of market volatilities on Beijing Yanjing and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and China Molybdenum.
Diversification Opportunities for Beijing Yanjing and China Molybdenum
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and China Molybdenum go up and down completely randomly.
Pair Corralation between Beijing Yanjing and China Molybdenum
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 0.82 times more return on investment than China Molybdenum. However, Beijing Yanjing Brewery is 1.22 times less risky than China Molybdenum. It trades about 0.03 of its potential returns per unit of risk. China Molybdenum Co is currently generating about -0.1 per unit of risk. If you would invest 1,012 in Beijing Yanjing Brewery on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Beijing Yanjing Brewery or generate 0.69% 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. China Molybdenum Co
Performance |
| Timeline |
| Beijing Yanjing Brewery |
| China Molybdenum |
Beijing Yanjing and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Yanjing and China Molybdenum
The main advantage of trading using opposite Beijing Yanjing and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum's long position.| Beijing Yanjing vs. PetroChina Co Ltd | Beijing Yanjing vs. China Mobile Limited | Beijing Yanjing vs. Ping An Insurance | Beijing Yanjing vs. China Petroleum Chemical |
| China Molybdenum vs. Beijing Yanjing Brewery | China Molybdenum vs. CICC Fund Management | China Molybdenum vs. Eastroc Beverage Group | China Molybdenum vs. Shenzhen Kexin Communication |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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