Correlation Between New Hope and Beijing Sanyuan
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By analyzing existing cross correlation between New Hope Dairy and Beijing Sanyuan Foods, you can compare the effects of market volatilities on New Hope and Beijing Sanyuan 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 New Hope with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Beijing Sanyuan.
Diversification Opportunities for New Hope and Beijing Sanyuan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Beijing is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and New Hope 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 New Hope Dairy are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of New Hope i.e., New Hope and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between New Hope and Beijing Sanyuan
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.57 times more return on investment than Beijing Sanyuan. However, New Hope is 1.57 times more volatile than Beijing Sanyuan Foods. It trades about 0.07 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about 0.0 per unit of risk. If you would invest 1,022 in New Hope Dairy on August 25, 2024 and sell it today you would earn a total of 207.00 from holding New Hope Dairy or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| New Hope Dairy |
| Beijing Sanyuan Foods |
New Hope and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Beijing Sanyuan
The main advantage of trading using opposite New Hope and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Beijing Sanyuan 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 Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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