Correlation Between Beijing HuaYuanYiTong and Nanjing Putian
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By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Nanjing Putian 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 Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Nanjing Putian.
Diversification Opportunities for Beijing HuaYuanYiTong and Nanjing Putian
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Nanjing is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec 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 Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Nanjing Putian go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Nanjing Putian
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to under-perform the Nanjing Putian. But the stock apears to be less risky and, when comparing its historical volatility, Beijing HuaYuanYiTong Thermal is 2.2 times less risky than Nanjing Putian. The stock trades about -0.21 of its potential returns per unit of risk. The Nanjing Putian Telecommunications is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 412.00 in Nanjing Putian Telecommunications on October 25, 2024 and sell it today you would lose (23.00) from holding Nanjing Putian Telecommunications or give up 5.58% 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. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Beijing HuaYuanYiTong |
| Nanjing Putian Telec |
Beijing HuaYuanYiTong and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing HuaYuanYiTong and Nanjing Putian
The main advantage of trading using opposite Beijing HuaYuanYiTong and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.| Beijing HuaYuanYiTong vs. GRG Banking Equipment | Beijing HuaYuanYiTong vs. Shaanxi Broadcast TV | Beijing HuaYuanYiTong vs. Anhui Transport Consulting | Beijing HuaYuanYiTong vs. Qilu Bank Co |
| Nanjing Putian vs. Kweichow Moutai Co | Nanjing Putian vs. NAURA Technology Group | Nanjing Putian vs. APT Medical | Nanjing Putian vs. BYD Co Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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