Correlation Between North Chemical and Beijing Sanyuan
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By analyzing existing cross correlation between North Chemical Industries and Beijing Sanyuan Foods, you can compare the effects of market volatilities on North Chemical and Beijing Sanyuan 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 North Chemical with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Chemical and Beijing Sanyuan.
Diversification Opportunities for North Chemical and Beijing Sanyuan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Beijing is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding North Chemical Industries and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and North Chemical 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 North Chemical Industries are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of North Chemical i.e., North Chemical and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between North Chemical and Beijing Sanyuan
Assuming the 90 days trading horizon North Chemical Industries is expected to generate 1.9 times more return on investment than Beijing Sanyuan. However, North Chemical is 1.9 times more volatile than Beijing Sanyuan Foods. It trades about 0.02 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about -0.01 per unit of risk. If you would invest 1,160 in North Chemical Industries on September 5, 2024 and sell it today you would earn a total of 25.00 from holding North Chemical Industries or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Chemical Industries vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| North Chemical Industries |
| Beijing Sanyuan Foods |
North Chemical and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Chemical and Beijing Sanyuan
The main advantage of trading using opposite North Chemical and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Chemical position performs unexpectedly, Beijing Sanyuan 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 Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| North Chemical vs. Beijing Sanyuan Foods | North Chemical vs. Innovative Medical Management | North Chemical vs. Shandong Huifa Foodstuff | North Chemical vs. Muyuan Foodstuff Co |
| Beijing Sanyuan vs. Xian International Medical | Beijing Sanyuan vs. Xinjiang Zhongtai Chemical | Beijing Sanyuan vs. Xilong Chemical Co | Beijing Sanyuan vs. North Huajin Chemical |
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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