Correlation Between Beijing Bewinner and Qijing Machinery
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By analyzing existing cross correlation between Beijing Bewinner Communications and Qijing Machinery, you can compare the effects of market volatilities on Beijing Bewinner and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Bewinner and Qijing Machinery.
Diversification Opportunities for Beijing Bewinner and Qijing Machinery
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Qijing is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Bewinner Communication and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Beijing Bewinner i.e., Beijing Bewinner and Qijing Machinery go up and down completely randomly.
Pair Corralation between Beijing Bewinner and Qijing Machinery
Assuming the 90 days trading horizon Beijing Bewinner Communications is expected to generate 1.36 times more return on investment than Qijing Machinery. However, Beijing Bewinner is 1.36 times more volatile than Qijing Machinery. It trades about 0.09 of its potential returns per unit of risk. Qijing Machinery is currently generating about 0.08 per unit of risk. If you would invest 374.00 in Beijing Bewinner Communications on November 8, 2024 and sell it today you would earn a total of 359.00 from holding Beijing Bewinner Communications or generate 95.99% 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. Qijing Machinery
Performance |
| Timeline |
| Beijing Bewinner Com |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Qijing Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Beijing Bewinner and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Bewinner and Qijing Machinery
The main advantage of trading using opposite Beijing Bewinner and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Bewinner position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.The idea behind Beijing Bewinner Communications and Qijing Machinery 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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