Correlation Between Jiugui Liquor and Beijing Watertek
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By analyzing existing cross correlation between Jiugui Liquor Co and Beijing Watertek Information, you can compare the effects of market volatilities on Jiugui Liquor and Beijing Watertek 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 Jiugui Liquor with a short position of Beijing Watertek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiugui Liquor and Beijing Watertek.
Diversification Opportunities for Jiugui Liquor and Beijing Watertek
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiugui and Beijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jiugui Liquor Co and Beijing Watertek Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Watertek Inf and Jiugui Liquor 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 Jiugui Liquor Co are associated (or correlated) with Beijing Watertek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Watertek Inf has no effect on the direction of Jiugui Liquor i.e., Jiugui Liquor and Beijing Watertek go up and down completely randomly.
Pair Corralation between Jiugui Liquor and Beijing Watertek
Assuming the 90 days trading horizon Jiugui Liquor Co is expected to under-perform the Beijing Watertek. But the stock apears to be less risky and, when comparing its historical volatility, Jiugui Liquor Co is 1.4 times less risky than Beijing Watertek. The stock trades about -0.15 of its potential returns per unit of risk. The Beijing Watertek Information is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Beijing Watertek Information on November 7, 2024 and sell it today you would earn a total of 22.00 from holding Beijing Watertek Information or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiugui Liquor Co vs. Beijing Watertek Information
Performance |
| Timeline |
| Jiugui Liquor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beijing Watertek Inf |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiugui Liquor and Beijing Watertek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiugui Liquor and Beijing Watertek
The main advantage of trading using opposite Jiugui Liquor and Beijing Watertek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiugui Liquor position performs unexpectedly, Beijing Watertek 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 Beijing Watertek will offset losses from the drop in Beijing Watertek's long position.The idea behind Jiugui Liquor Co and Beijing Watertek Information 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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