Correlation Between Chengdu Xinzhu and Beijing Wantai
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Beijing Wantai Biological, you can compare the effects of market volatilities on Chengdu Xinzhu and Beijing Wantai 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 Chengdu Xinzhu with a short position of Beijing Wantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Beijing Wantai.
Diversification Opportunities for Chengdu Xinzhu and Beijing Wantai
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chengdu and Beijing is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Beijing Wantai Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wantai Biological and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge are associated (or correlated) with Beijing Wantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wantai Biological has no effect on the direction of Chengdu Xinzhu i.e., Chengdu Xinzhu and Beijing Wantai go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Beijing Wantai
Assuming the 90 days trading horizon Chengdu Xinzhu is expected to generate 2.78 times less return on investment than Beijing Wantai. But when comparing it to its historical volatility, Chengdu Xinzhu RoadBridge is 1.06 times less risky than Beijing Wantai. It trades about 0.01 of its potential returns per unit of risk. Beijing Wantai Biological is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,020 in Beijing Wantai Biological on August 25, 2024 and sell it today you would earn a total of 297.00 from holding Beijing Wantai Biological or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Beijing Wantai Biological
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| Beijing Wantai Biological |
Chengdu Xinzhu and Beijing Wantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and Beijing Wantai
The main advantage of trading using opposite Chengdu Xinzhu and Beijing Wantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu position performs unexpectedly, Beijing Wantai 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 Wantai will offset losses from the drop in Beijing Wantai's long position.| Chengdu Xinzhu vs. Chengdu Kanghua Biological | Chengdu Xinzhu vs. Beijing Wantai Biological | Chengdu Xinzhu vs. Suzhou Novoprotein Scientific | Chengdu Xinzhu vs. Aluminum Corp of |
| Beijing Wantai vs. China State Construction | Beijing Wantai vs. Poly Real Estate | Beijing Wantai vs. China Vanke Co | Beijing Wantai vs. China Merchants Shekou |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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