Correlation Between Beijing Shunxin and Tongyu Communication
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By analyzing existing cross correlation between Beijing Shunxin Agriculture and Tongyu Communication, you can compare the effects of market volatilities on Beijing Shunxin and Tongyu Communication 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 Shunxin with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shunxin and Tongyu Communication.
Diversification Opportunities for Beijing Shunxin and Tongyu Communication
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Tongyu is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shunxin Agriculture and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication and Beijing Shunxin 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 Shunxin Agriculture are associated (or correlated) with Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Beijing Shunxin i.e., Beijing Shunxin and Tongyu Communication go up and down completely randomly.
Pair Corralation between Beijing Shunxin and Tongyu Communication
Assuming the 90 days trading horizon Beijing Shunxin Agriculture is expected to under-perform the Tongyu Communication. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Shunxin Agriculture is 1.27 times less risky than Tongyu Communication. The stock trades about -0.35 of its potential returns per unit of risk. The Tongyu Communication is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Tongyu Communication on October 12, 2024 and sell it today you would lose (211.00) from holding Tongyu Communication or give up 12.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Shunxin Agriculture vs. Tongyu Communication
Performance |
| Timeline |
| Beijing Shunxin Agri |
| Tongyu Communication |
Beijing Shunxin and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Shunxin and Tongyu Communication
The main advantage of trading using opposite Beijing Shunxin and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shunxin position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Beijing Shunxin vs. Anhui Xinhua Media | Beijing Shunxin vs. Guangzhou Jinyi Media | Beijing Shunxin vs. Eastern Communications Co | Beijing Shunxin vs. Beijing Bewinner Communications |
| Tongyu Communication vs. Beijing Shunxin Agriculture | Tongyu Communication vs. Shanghai Jinfeng Wine | Tongyu Communication vs. Tonghua Grape Wine | Tongyu Communication vs. Citic Guoan Wine |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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