Correlation Between Focus Media and Beijing Yanjing
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By analyzing existing cross correlation between Focus Media Information and Beijing Yanjing Brewery, you can compare the effects of market volatilities on Focus Media and Beijing Yanjing 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 Focus Media with a short position of Beijing Yanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and Beijing Yanjing.
Diversification Opportunities for Focus Media and Beijing Yanjing
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and Beijing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and Focus Media 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 Focus Media Information are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of Focus Media i.e., Focus Media and Beijing Yanjing go up and down completely randomly.
Pair Corralation between Focus Media and Beijing Yanjing
Assuming the 90 days trading horizon Focus Media Information is expected to generate 1.01 times more return on investment than Beijing Yanjing. However, Focus Media is 1.01 times more volatile than Beijing Yanjing Brewery. It trades about 0.03 of its potential returns per unit of risk. Beijing Yanjing Brewery is currently generating about -0.02 per unit of risk. If you would invest 616.00 in Focus Media Information on August 28, 2024 and sell it today you would earn a total of 78.00 from holding Focus Media Information or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Media Information vs. Beijing Yanjing Brewery
Performance |
| Timeline |
| Focus Media Information |
| Beijing Yanjing Brewery |
Focus Media and Beijing Yanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and Beijing Yanjing
The main advantage of trading using opposite Focus Media and Beijing Yanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, Beijing Yanjing 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 Yanjing will offset losses from the drop in Beijing Yanjing's long position.| Focus Media vs. Agricultural Bank of | Focus Media vs. Industrial and Commercial | Focus Media vs. Bank of China | Focus Media vs. China Construction Bank |
| Beijing Yanjing vs. China Petroleum Chemical | Beijing Yanjing vs. PetroChina Co Ltd | Beijing Yanjing vs. China State Construction | Beijing Yanjing vs. China Railway Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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