Correlation Between Zhejiang Yayi and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Zhejiang Yayi Metal and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Zhejiang Yayi and Beijing HuaYuanYiTong 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 Zhejiang Yayi with a short position of Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yayi and Beijing HuaYuanYiTong.
Diversification Opportunities for Zhejiang Yayi and Beijing HuaYuanYiTong
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Beijing is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yayi Metal and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong and Zhejiang Yayi 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 Zhejiang Yayi Metal are associated (or correlated) with Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Zhejiang Yayi i.e., Zhejiang Yayi and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Zhejiang Yayi and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Zhejiang Yayi is expected to generate 2.28 times less return on investment than Beijing HuaYuanYiTong. But when comparing it to its historical volatility, Zhejiang Yayi Metal is 1.21 times less risky than Beijing HuaYuanYiTong. It trades about 0.03 of its potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Beijing HuaYuanYiTong Thermal on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Beijing HuaYuanYiTong Thermal or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yayi Metal vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Zhejiang Yayi Metal |
| Beijing HuaYuanYiTong |
Zhejiang Yayi and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yayi and Beijing HuaYuanYiTong
The main advantage of trading using opposite Zhejiang Yayi and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yayi position performs unexpectedly, Beijing HuaYuanYiTong 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 HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Zhejiang Yayi vs. China Petroleum Chemical | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. China State Construction | Zhejiang Yayi vs. China Railway Group |
| Beijing HuaYuanYiTong vs. China Petroleum Chemical | Beijing HuaYuanYiTong vs. PetroChina Co Ltd | Beijing HuaYuanYiTong vs. China State Construction | Beijing HuaYuanYiTong 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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