Correlation Between Shaanxi Energy and Beijing New
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By analyzing existing cross correlation between Shaanxi Energy Investment and Beijing New Building, you can compare the effects of market volatilities on Shaanxi Energy and Beijing New 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 Shaanxi Energy with a short position of Beijing New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Beijing New.
Diversification Opportunities for Shaanxi Energy and Beijing New
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Beijing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Beijing New Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing New Building and Shaanxi Energy 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 Shaanxi Energy Investment are associated (or correlated) with Beijing New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing New Building has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Beijing New go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Beijing New
Assuming the 90 days trading horizon Shaanxi Energy is expected to generate 4.4 times less return on investment than Beijing New. But when comparing it to its historical volatility, Shaanxi Energy Investment is 1.23 times less risky than Beijing New. It trades about 0.01 of its potential returns per unit of risk. Beijing New Building is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,498 in Beijing New Building on September 12, 2024 and sell it today you would earn a total of 365.00 from holding Beijing New Building or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Beijing New Building
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Beijing New Building |
Shaanxi Energy and Beijing New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Beijing New
The main advantage of trading using opposite Shaanxi Energy and Beijing New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Beijing New 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 New will offset losses from the drop in Beijing New's long position.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Gansu Jiu Steel | Shaanxi Energy vs. Shandong Mining Machinery | Shaanxi Energy vs. Aba Chemicals Corp |
| Beijing New vs. Huaxia Fund Management | Beijing New vs. Shaanxi Energy Investment | Beijing New vs. Nuode Investment Co | Beijing New vs. Hubei Geoway 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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