Correlation Between Beijing Shunxin and Guangdong Liantai
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By analyzing existing cross correlation between Beijing Shunxin Agriculture and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Beijing Shunxin and Guangdong Liantai 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 Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shunxin and Guangdong Liantai.
Diversification Opportunities for Beijing Shunxin and Guangdong Liantai
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guangdong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shunxin Agriculture and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai 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 Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Beijing Shunxin i.e., Beijing Shunxin and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Beijing Shunxin and Guangdong Liantai
Assuming the 90 days trading horizon Beijing Shunxin Agriculture is expected to under-perform the Guangdong Liantai. In addition to that, Beijing Shunxin is 1.32 times more volatile than Guangdong Liantai Environmental. It trades about -0.03 of its total potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about -0.03 per unit of volatility. If you would invest 576.00 in Guangdong Liantai Environmental on October 16, 2024 and sell it today you would lose (200.00) from holding Guangdong Liantai Environmental or give up 34.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Shunxin Agriculture vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Beijing Shunxin Agri |
| Guangdong Liantai |
Beijing Shunxin and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Shunxin and Guangdong Liantai
The main advantage of trading using opposite Beijing Shunxin and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shunxin position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| Beijing Shunxin vs. Maccura Biotechnology Co | Beijing Shunxin vs. Shenzhen Bioeasy Biotechnology | Beijing Shunxin vs. Spring Airlines Co | Beijing Shunxin vs. Guizhou Chanhen Chemical |
| Guangdong Liantai vs. Western Metal Materials | Guangdong Liantai vs. Cultural Investment Holdings | Guangdong Liantai vs. Xinjiang Baodi Mining | Guangdong Liantai vs. Beijing Shunxin Agriculture |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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