Correlation Between Beijing HuaYuanYiTong and Zhejiang Yayi
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By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Zhejiang Yayi 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 Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Zhejiang Yayi.
Diversification Opportunities for Beijing HuaYuanYiTong and Zhejiang Yayi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Zhejiang is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal 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 Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Zhejiang Yayi
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to under-perform the Zhejiang Yayi. In addition to that, Beijing HuaYuanYiTong is 1.33 times more volatile than Zhejiang Yayi Metal. It trades about -0.01 of its total potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about -0.01 per unit of volatility. If you would invest 2,572 in Zhejiang Yayi Metal on August 29, 2024 and sell it today you would lose (28.00) from holding Zhejiang Yayi Metal or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing HuaYuanYiTong Thermal vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Beijing HuaYuanYiTong |
| Zhejiang Yayi Metal |
Beijing HuaYuanYiTong and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing HuaYuanYiTong and Zhejiang Yayi
The main advantage of trading using opposite Beijing HuaYuanYiTong and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Zhejiang Yayi 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 Zhejiang Yayi will offset losses from the drop in Zhejiang Yayi's long position.| Beijing HuaYuanYiTong vs. Industrial and Commercial | Beijing HuaYuanYiTong vs. Agricultural Bank of | Beijing HuaYuanYiTong vs. China Construction Bank | Beijing HuaYuanYiTong vs. Bank of China |
| Zhejiang Yayi vs. China Sports Industry | Zhejiang Yayi vs. New Hope Dairy | Zhejiang Yayi vs. Sportsoul Co Ltd | Zhejiang Yayi vs. Sichuan Teway Food |
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 CEOs Directory module to screen CEOs from public companies around the world.
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