Correlation Between Bus Online and Chengdu B-ray
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By analyzing existing cross correlation between Bus Online Co and Chengdu B ray Media, you can compare the effects of market volatilities on Bus Online and Chengdu B-ray 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 Bus Online with a short position of Chengdu B-ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bus Online and Chengdu B-ray.
Diversification Opportunities for Bus Online and Chengdu B-ray
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bus and Chengdu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bus Online Co and Chengdu B ray Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu B ray and Bus Online 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 Bus Online Co are associated (or correlated) with Chengdu B-ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu B ray has no effect on the direction of Bus Online i.e., Bus Online and Chengdu B-ray go up and down completely randomly.
Pair Corralation between Bus Online and Chengdu B-ray
Assuming the 90 days trading horizon Bus Online Co is expected to under-perform the Chengdu B-ray. But the stock apears to be less risky and, when comparing its historical volatility, Bus Online Co is 1.18 times less risky than Chengdu B-ray. The stock trades about -0.07 of its potential returns per unit of risk. The Chengdu B ray Media is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 490.00 in Chengdu B ray Media on November 7, 2024 and sell it today you would lose (41.00) from holding Chengdu B ray Media or give up 8.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bus Online Co vs. Chengdu B ray Media
Performance |
| Timeline |
| Bus Online |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chengdu B ray |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bus Online and Chengdu B-ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bus Online and Chengdu B-ray
The main advantage of trading using opposite Bus Online and Chengdu B-ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bus Online position performs unexpectedly, Chengdu B-ray 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 Chengdu B-ray will offset losses from the drop in Chengdu B-ray's long position.The idea behind Bus Online Co and Chengdu B ray Media 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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