Correlation Between Hunan TV and Beijing Jiaman
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By analyzing existing cross correlation between Hunan TV Broadcast and Beijing Jiaman Dress, you can compare the effects of market volatilities on Hunan TV and Beijing Jiaman 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 Hunan TV with a short position of Beijing Jiaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan TV and Beijing Jiaman.
Diversification Opportunities for Hunan TV and Beijing Jiaman
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Beijing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hunan TV Broadcast and Beijing Jiaman Dress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Jiaman Dress and Hunan TV 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 Hunan TV Broadcast are associated (or correlated) with Beijing Jiaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Jiaman Dress has no effect on the direction of Hunan TV i.e., Hunan TV and Beijing Jiaman go up and down completely randomly.
Pair Corralation between Hunan TV and Beijing Jiaman
Assuming the 90 days trading horizon Hunan TV Broadcast is expected to generate 1.35 times more return on investment than Beijing Jiaman. However, Hunan TV is 1.35 times more volatile than Beijing Jiaman Dress. It trades about 0.29 of its potential returns per unit of risk. Beijing Jiaman Dress is currently generating about 0.05 per unit of risk. If you would invest 654.00 in Hunan TV Broadcast on November 8, 2024 and sell it today you would earn a total of 87.00 from holding Hunan TV Broadcast or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan TV Broadcast vs. Beijing Jiaman Dress
Performance |
| Timeline |
| Hunan TV Broadcast |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beijing Jiaman Dress |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hunan TV and Beijing Jiaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan TV and Beijing Jiaman
The main advantage of trading using opposite Hunan TV and Beijing Jiaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan TV position performs unexpectedly, Beijing Jiaman 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 Jiaman will offset losses from the drop in Beijing Jiaman's long position.The idea behind Hunan TV Broadcast and Beijing Jiaman Dress 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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