Correlation Between Beingmate Baby and Anhui Deli

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Can any of the company-specific risk be diversified away by investing in both Beingmate Baby and Anhui Deli at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Beingmate Baby and Anhui Deli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beingmate Baby Child and Anhui Deli Household, you can compare the effects of market volatilities on Beingmate Baby and Anhui Deli 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 Beingmate Baby with a short position of Anhui Deli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beingmate Baby and Anhui Deli.

Diversification Opportunities for Beingmate Baby and Anhui Deli

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Beingmate and Anhui is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Beingmate Baby Child and Anhui Deli Household in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Deli Household and Beingmate Baby 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 Beingmate Baby Child are associated (or correlated) with Anhui Deli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Deli Household has no effect on the direction of Beingmate Baby i.e., Beingmate Baby and Anhui Deli go up and down completely randomly.

Pair Corralation between Beingmate Baby and Anhui Deli

Assuming the 90 days trading horizon Beingmate Baby Child is expected to generate 0.41 times more return on investment than Anhui Deli. However, Beingmate Baby Child is 2.46 times less risky than Anhui Deli. It trades about 0.15 of its potential returns per unit of risk. Anhui Deli Household is currently generating about 0.06 per unit of risk. If you would invest  385.00  in Beingmate Baby Child on November 7, 2024 and sell it today you would earn a total of  22.00  from holding Beingmate Baby Child or generate 5.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Beingmate Baby Child  vs.  Anhui Deli Household

 Performance 
       Timeline  
Beingmate Baby Child 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beingmate Baby Child has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Anhui Deli Household 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Anhui Deli Household has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beingmate Baby and Anhui Deli Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beingmate Baby and Anhui Deli

The main advantage of trading using opposite Beingmate Baby and Anhui Deli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beingmate Baby position performs unexpectedly, Anhui Deli 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 Anhui Deli will offset losses from the drop in Anhui Deli's long position.
The idea behind Beingmate Baby Child and Anhui Deli Household 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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