Correlation Between Beijing Kaiwen and Chongqing Brewery
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By analyzing existing cross correlation between Beijing Kaiwen Education and Chongqing Brewery Co, you can compare the effects of market volatilities on Beijing Kaiwen and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kaiwen and Chongqing Brewery.
Diversification Opportunities for Beijing Kaiwen and Chongqing Brewery
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Chongqing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kaiwen Education and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Beijing Kaiwen i.e., Beijing Kaiwen and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Beijing Kaiwen and Chongqing Brewery
Assuming the 90 days trading horizon Beijing Kaiwen Education is expected to generate 1.4 times more return on investment than Chongqing Brewery. However, Beijing Kaiwen is 1.4 times more volatile than Chongqing Brewery Co. It trades about 0.18 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.14 per unit of risk. If you would invest 377.00 in Beijing Kaiwen Education on September 12, 2024 and sell it today you would earn a total of 172.00 from holding Beijing Kaiwen Education or generate 45.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Beijing Kaiwen Education vs. Chongqing Brewery Co
Performance |
| Timeline |
| Beijing Kaiwen Education |
| Chongqing Brewery |
Beijing Kaiwen and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kaiwen and Chongqing Brewery
The main advantage of trading using opposite Beijing Kaiwen and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kaiwen position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Beijing Kaiwen vs. Nanjing Putian Telecommunications | Beijing Kaiwen vs. Tianjin Realty Development | Beijing Kaiwen vs. Kangyue Technology Co | Beijing Kaiwen vs. Shenzhen Hifuture Electric |
| Chongqing Brewery vs. Epoxy Base Electronic | Chongqing Brewery vs. Xinya Electronic Co | Chongqing Brewery vs. Dareway Software Co | Chongqing Brewery vs. Shantou Wanshun Package |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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