Correlation Between Shengyuan Environmental and Beijing Bewinner
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By analyzing existing cross correlation between Shengyuan Environmental Protection and Beijing Bewinner Communications, you can compare the effects of market volatilities on Shengyuan Environmental and Beijing Bewinner 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 Shengyuan Environmental with a short position of Beijing Bewinner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengyuan Environmental and Beijing Bewinner.
Diversification Opportunities for Shengyuan Environmental and Beijing Bewinner
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shengyuan and Beijing is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shengyuan Environmental Protec and Beijing Bewinner Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bewinner Com and Shengyuan Environmental 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 Shengyuan Environmental Protection are associated (or correlated) with Beijing Bewinner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bewinner Com has no effect on the direction of Shengyuan Environmental i.e., Shengyuan Environmental and Beijing Bewinner go up and down completely randomly.
Pair Corralation between Shengyuan Environmental and Beijing Bewinner
Assuming the 90 days trading horizon Shengyuan Environmental is expected to generate 3.4 times less return on investment than Beijing Bewinner. But when comparing it to its historical volatility, Shengyuan Environmental Protection is 1.54 times less risky than Beijing Bewinner. It trades about 0.04 of its potential returns per unit of risk. Beijing Bewinner Communications is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 374.00 in Beijing Bewinner Communications on December 11, 2024 and sell it today you would earn a total of 386.00 from holding Beijing Bewinner Communications or generate 103.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengyuan Environmental Protec vs. Beijing Bewinner Communication
Performance |
| Timeline |
| Shengyuan Environmental |
| Beijing Bewinner Com |
Shengyuan Environmental and Beijing Bewinner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengyuan Environmental and Beijing Bewinner
The main advantage of trading using opposite Shengyuan Environmental and Beijing Bewinner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengyuan Environmental position performs unexpectedly, Beijing Bewinner 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 Bewinner will offset losses from the drop in Beijing Bewinner's long position.The idea behind Shengyuan Environmental Protection and Beijing Bewinner Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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