Correlation Between Beijing Kaiwen and Shenzhen Changfang
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By analyzing existing cross correlation between Beijing Kaiwen Education and Shenzhen Changfang Light, you can compare the effects of market volatilities on Beijing Kaiwen and Shenzhen Changfang 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 Kaiwen with a short position of Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kaiwen and Shenzhen Changfang.
Diversification Opportunities for Beijing Kaiwen and Shenzhen Changfang
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Shenzhen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kaiwen Education and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light and Beijing Kaiwen 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 Kaiwen Education are associated (or correlated) with Shenzhen Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Beijing Kaiwen i.e., Beijing Kaiwen and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Beijing Kaiwen and Shenzhen Changfang
Assuming the 90 days trading horizon Beijing Kaiwen Education is expected to generate 0.9 times more return on investment than Shenzhen Changfang. However, Beijing Kaiwen Education is 1.12 times less risky than Shenzhen Changfang. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Changfang Light is currently generating about 0.02 per unit of risk. If you would invest 493.00 in Beijing Kaiwen Education on September 14, 2024 and sell it today you would earn a total of 96.00 from holding Beijing Kaiwen Education or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Beijing Kaiwen Education vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Beijing Kaiwen Education |
| Shenzhen Changfang Light |
Beijing Kaiwen and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kaiwen and Shenzhen Changfang
The main advantage of trading using opposite Beijing Kaiwen and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kaiwen position performs unexpectedly, Shenzhen Changfang 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 Shenzhen Changfang will offset losses from the drop in Shenzhen Changfang's long position.| Beijing Kaiwen vs. Shandong Huifa Foodstuff | Beijing Kaiwen vs. Youyou Foods Co | Beijing Kaiwen vs. Aluminum Corp of | Beijing Kaiwen vs. Guangdong Jingyi Metal |
| Shenzhen Changfang vs. Industrial and Commercial | Shenzhen Changfang vs. Agricultural Bank of | Shenzhen Changfang vs. China Construction Bank | Shenzhen Changfang vs. Bank of China |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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