Correlation Between Xinjiang Beixin and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Xinjiang Beixin and Beijing HuaYuanYiTong 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 Xinjiang Beixin with a short position of Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Beijing HuaYuanYiTong.
Diversification Opportunities for Xinjiang Beixin and Beijing HuaYuanYiTong
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Beijing is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong and Xinjiang Beixin 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 Xinjiang Beixin RoadBridge are associated (or correlated) with Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Beijing HuaYuanYiTong. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Beixin RoadBridge is 1.26 times less risky than Beijing HuaYuanYiTong. The stock trades about -0.03 of its potential returns per unit of risk. The Beijing HuaYuanYiTong Thermal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 898.00 in Beijing HuaYuanYiTong Thermal on November 7, 2024 and sell it today you would earn a total of 41.00 from holding Beijing HuaYuanYiTong Thermal or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Xinjiang Beixin Road |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beijing HuaYuanYiTong |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xinjiang Beixin and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Beijing HuaYuanYiTong
The main advantage of trading using opposite Xinjiang Beixin and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Beijing HuaYuanYiTong 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 HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.The idea behind Xinjiang Beixin RoadBridge and Beijing HuaYuanYiTong Thermal 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 Managers module to screen money managers from public funds and ETFs managed around the world.
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