Correlation Between Beijing Cisri and Huadong Medicine
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By analyzing existing cross correlation between Beijing Cisri Gaona and Huadong Medicine Co, you can compare the effects of market volatilities on Beijing Cisri and Huadong Medicine 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 Cisri with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Cisri and Huadong Medicine.
Diversification Opportunities for Beijing Cisri and Huadong Medicine
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Huadong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Cisri Gaona and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Beijing Cisri 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 Cisri Gaona are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Beijing Cisri i.e., Beijing Cisri and Huadong Medicine go up and down completely randomly.
Pair Corralation between Beijing Cisri and Huadong Medicine
Assuming the 90 days trading horizon Beijing Cisri Gaona is expected to under-perform the Huadong Medicine. In addition to that, Beijing Cisri is 1.45 times more volatile than Huadong Medicine Co. It trades about -0.03 of its total potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.01 per unit of volatility. If you would invest 4,126 in Huadong Medicine Co on September 26, 2024 and sell it today you would lose (521.00) from holding Huadong Medicine Co or give up 12.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Cisri Gaona vs. Huadong Medicine Co
Performance |
| Timeline |
| Beijing Cisri Gaona |
| Huadong Medicine |
Beijing Cisri and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Cisri and Huadong Medicine
The main advantage of trading using opposite Beijing Cisri and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Cisri position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Beijing Cisri vs. New China Life | Beijing Cisri vs. Ming Yang Smart | Beijing Cisri vs. 159681 | Beijing Cisri vs. 159005 |
| Huadong Medicine vs. Industrial and Commercial | Huadong Medicine vs. Kweichow Moutai Co | Huadong Medicine vs. Agricultural Bank of | Huadong Medicine vs. China Mobile Limited |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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