Correlation Between Beijing Venustech and Eastern Air
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By analyzing existing cross correlation between Beijing Venustech and Eastern Air Logistics, you can compare the effects of market volatilities on Beijing Venustech and Eastern Air 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 Venustech with a short position of Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Venustech and Eastern Air.
Diversification Opportunities for Beijing Venustech and Eastern Air
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Eastern is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Venustech and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics and Beijing Venustech 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 Venustech are associated (or correlated) with Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of Beijing Venustech i.e., Beijing Venustech and Eastern Air go up and down completely randomly.
Pair Corralation between Beijing Venustech and Eastern Air
Assuming the 90 days trading horizon Beijing Venustech is expected to under-perform the Eastern Air. In addition to that, Beijing Venustech is 1.59 times more volatile than Eastern Air Logistics. It trades about -0.27 of its total potential returns per unit of risk. Eastern Air Logistics is currently generating about -0.2 per unit of volatility. If you would invest 1,707 in Eastern Air Logistics on September 12, 2024 and sell it today you would lose (114.00) from holding Eastern Air Logistics or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Venustech vs. Eastern Air Logistics
Performance |
| Timeline |
| Beijing Venustech |
| Eastern Air Logistics |
Beijing Venustech and Eastern Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Venustech and Eastern Air
The main advantage of trading using opposite Beijing Venustech and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Venustech position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air's long position.| Beijing Venustech vs. Xiangyang Automobile Bearing | Beijing Venustech vs. ButOne Information Corp | Beijing Venustech vs. Haima Automobile Group | Beijing Venustech vs. Ningbo Fangzheng Automobile |
| Eastern Air vs. Chongqing Brewery Co | Eastern Air vs. Gan Yuan Foods | Eastern Air vs. Beijing Yanjing Brewery | Eastern Air vs. Ligao Foods CoLtd |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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