Correlation Between Beijing Bewinner and China Satellite
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By analyzing existing cross correlation between Beijing Bewinner Communications and China Satellite Communications, you can compare the effects of market volatilities on Beijing Bewinner and China Satellite 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 Bewinner with a short position of China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Bewinner and China Satellite.
Diversification Opportunities for Beijing Bewinner and China Satellite
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and China is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Bewinner Communication and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm and Beijing Bewinner 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 Bewinner Communications are associated (or correlated) with China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Beijing Bewinner i.e., Beijing Bewinner and China Satellite go up and down completely randomly.
Pair Corralation between Beijing Bewinner and China Satellite
Assuming the 90 days trading horizon Beijing Bewinner Communications is expected to generate 1.8 times more return on investment than China Satellite. However, Beijing Bewinner is 1.8 times more volatile than China Satellite Communications. It trades about 0.08 of its potential returns per unit of risk. China Satellite Communications is currently generating about -0.2 per unit of risk. If you would invest 679.00 in Beijing Bewinner Communications on October 25, 2024 and sell it today you would earn a total of 38.00 from holding Beijing Bewinner Communications or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Bewinner Communication vs. China Satellite Communications
Performance |
| Timeline |
| Beijing Bewinner Com |
| China Satellite Comm |
Beijing Bewinner and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Bewinner and China Satellite
The main advantage of trading using opposite Beijing Bewinner and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Bewinner position performs unexpectedly, China Satellite 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 China Satellite will offset losses from the drop in China Satellite's long position.The idea behind Beijing Bewinner Communications and China Satellite Communications 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.
| China Satellite vs. Industrial and Commercial | China Satellite vs. Agricultural Bank of | China Satellite vs. China Construction Bank | China Satellite vs. Bank of China |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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