Correlation Between Wintao Communications and Beijing Wantai
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By analyzing existing cross correlation between Wintao Communications Co and Beijing Wantai Biological, you can compare the effects of market volatilities on Wintao Communications and Beijing Wantai 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 Wintao Communications with a short position of Beijing Wantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Beijing Wantai.
Diversification Opportunities for Wintao Communications and Beijing Wantai
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wintao and Beijing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and Beijing Wantai Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wantai Biological and Wintao Communications 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 Wintao Communications Co are associated (or correlated) with Beijing Wantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wantai Biological has no effect on the direction of Wintao Communications i.e., Wintao Communications and Beijing Wantai go up and down completely randomly.
Pair Corralation between Wintao Communications and Beijing Wantai
Assuming the 90 days trading horizon Wintao Communications Co is expected to under-perform the Beijing Wantai. In addition to that, Wintao Communications is 1.7 times more volatile than Beijing Wantai Biological. It trades about -0.07 of its total potential returns per unit of risk. Beijing Wantai Biological is currently generating about -0.09 per unit of volatility. If you would invest 7,294 in Beijing Wantai Biological on October 30, 2024 and sell it today you would lose (485.00) from holding Beijing Wantai Biological or give up 6.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Beijing Wantai Biological
Performance |
| Timeline |
| Wintao Communications |
| Beijing Wantai Biological |
Wintao Communications and Beijing Wantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Beijing Wantai
The main advantage of trading using opposite Wintao Communications and Beijing Wantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, Beijing Wantai 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 Wantai will offset losses from the drop in Beijing Wantai's long position.The idea behind Wintao Communications Co and Beijing Wantai Biological 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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