Correlation Between Focus Media and Inner Mongolia
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By analyzing existing cross correlation between Focus Media Information and Inner Mongolia BaoTou, you can compare the effects of market volatilities on Focus Media and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and Inner Mongolia.
Diversification Opportunities for Focus Media and Inner Mongolia
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and Inner is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and Inner Mongolia BaoTou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia BaoTou 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia BaoTou has no effect on the direction of Focus Media i.e., Focus Media and Inner Mongolia go up and down completely randomly.
Pair Corralation between Focus Media and Inner Mongolia
Assuming the 90 days trading horizon Focus Media is expected to generate 1.22 times less return on investment than Inner Mongolia. But when comparing it to its historical volatility, Focus Media Information is 1.27 times less risky than Inner Mongolia. It trades about 0.17 of its potential returns per unit of risk. Inner Mongolia BaoTou is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Inner Mongolia BaoTou on August 25, 2024 and sell it today you would earn a total of 50.00 from holding Inner Mongolia BaoTou or generate 34.72% 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. Inner Mongolia BaoTou
Performance |
| Timeline |
| Focus Media Information |
| Inner Mongolia BaoTou |
Focus Media and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and Inner Mongolia
The main advantage of trading using opposite Focus Media and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia'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 |
| Inner Mongolia vs. Focus Media Information | Inner Mongolia vs. Qilu Bank Co | Inner Mongolia vs. Dalian Zeus Entertainment | Inner Mongolia vs. Jiangsu Financial Leasing |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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