Correlation Between Beijing Lanxum and Zhongtong Guomai
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By analyzing existing cross correlation between Beijing Lanxum Tech and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Beijing Lanxum and Zhongtong Guomai 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 Lanxum with a short position of Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Lanxum and Zhongtong Guomai.
Diversification Opportunities for Beijing Lanxum and Zhongtong Guomai
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Zhongtong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Lanxum Tech and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com and Beijing Lanxum 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 Lanxum Tech are associated (or correlated) with Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Beijing Lanxum i.e., Beijing Lanxum and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Beijing Lanxum and Zhongtong Guomai
Assuming the 90 days trading horizon Beijing Lanxum Tech is expected to generate 1.54 times more return on investment than Zhongtong Guomai. However, Beijing Lanxum is 1.54 times more volatile than Zhongtong Guomai Communication. It trades about 0.11 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.07 per unit of risk. If you would invest 242.00 in Beijing Lanxum Tech on September 12, 2024 and sell it today you would earn a total of 821.00 from holding Beijing Lanxum Tech or generate 339.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Lanxum Tech vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| Beijing Lanxum Tech |
| Zhongtong Guomai Com |
Beijing Lanxum and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Lanxum and Zhongtong Guomai
The main advantage of trading using opposite Beijing Lanxum and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Lanxum position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Beijing Lanxum vs. Xinjiang Tianrun Dairy | Beijing Lanxum vs. Namchow Food Group | Beijing Lanxum vs. Zhongyin Babi Food | Beijing Lanxum vs. Shenzhen Noposion Agrochemicals |
| Zhongtong Guomai vs. Gansu Jiu Steel | Zhongtong Guomai vs. Shandong Mining Machinery | Zhongtong Guomai vs. Aba Chemicals Corp | Zhongtong Guomai vs. BlueFocus Communication 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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