Correlation Between Beijing HuaYuanYiTong and Shanxi Tond
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By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Shanxi Tond Chemical, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Shanxi Tond 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 HuaYuanYiTong with a short position of Shanxi Tond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Shanxi Tond.
Diversification Opportunities for Beijing HuaYuanYiTong and Shanxi Tond
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shanxi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Shanxi Tond Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Tond Chemical and Beijing HuaYuanYiTong 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 HuaYuanYiTong Thermal are associated (or correlated) with Shanxi Tond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Tond Chemical has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Shanxi Tond go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Shanxi Tond
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to under-perform the Shanxi Tond. In addition to that, Beijing HuaYuanYiTong is 1.27 times more volatile than Shanxi Tond Chemical. It trades about 0.0 of its total potential returns per unit of risk. Shanxi Tond Chemical is currently generating about 0.0 per unit of volatility. If you would invest 500.00 in Shanxi Tond Chemical on October 14, 2024 and sell it today you would lose (10.00) from holding Shanxi Tond Chemical or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing HuaYuanYiTong Thermal vs. Shanxi Tond Chemical
Performance |
| Timeline |
| Beijing HuaYuanYiTong |
| Shanxi Tond Chemical |
Beijing HuaYuanYiTong and Shanxi Tond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing HuaYuanYiTong and Shanxi Tond
The main advantage of trading using opposite Beijing HuaYuanYiTong and Shanxi Tond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Shanxi Tond 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 Shanxi Tond will offset losses from the drop in Shanxi Tond's long position.| Beijing HuaYuanYiTong vs. CIMC Vehicles Co | Beijing HuaYuanYiTong vs. Qiaoyin Environmental Tech | Beijing HuaYuanYiTong vs. Dongfeng Automobile Co | Beijing HuaYuanYiTong vs. Guangdong Liantai Environmental |
| Shanxi Tond vs. Tibet Huayu Mining | Shanxi Tond vs. Hefei Metalforming Mach | Shanxi Tond vs. Beijing HuaYuanYiTong Thermal | Shanxi Tond vs. Xinjiang Baodi Mining |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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