Correlation Between Beijing Jiaman and Guocheng Mining
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By analyzing existing cross correlation between Beijing Jiaman Dress and Guocheng Mining Co, you can compare the effects of market volatilities on Beijing Jiaman and Guocheng Mining 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 Jiaman with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Jiaman and Guocheng Mining.
Diversification Opportunities for Beijing Jiaman and Guocheng Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guocheng is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Jiaman Dress and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining and Beijing Jiaman 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 Jiaman Dress are associated (or correlated) with Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Beijing Jiaman i.e., Beijing Jiaman and Guocheng Mining go up and down completely randomly.
Pair Corralation between Beijing Jiaman and Guocheng Mining
Assuming the 90 days trading horizon Beijing Jiaman Dress is expected to generate 0.75 times more return on investment than Guocheng Mining. However, Beijing Jiaman Dress is 1.34 times less risky than Guocheng Mining. It trades about -0.06 of its potential returns per unit of risk. Guocheng Mining Co is currently generating about -0.06 per unit of risk. If you would invest 2,066 in Beijing Jiaman Dress on October 29, 2024 and sell it today you would lose (66.00) from holding Beijing Jiaman Dress or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Jiaman Dress vs. Guocheng Mining Co
Performance |
| Timeline |
| Beijing Jiaman Dress |
| Guocheng Mining |
Beijing Jiaman and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Jiaman and Guocheng Mining
The main advantage of trading using opposite Beijing Jiaman and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Jiaman position performs unexpectedly, Guocheng Mining 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.| Beijing Jiaman vs. Duzhe Publishing Media | Beijing Jiaman vs. Changjiang Publishing Media | Beijing Jiaman vs. Jinhui Liquor Co | Beijing Jiaman vs. Yunnan Jianzhijia Health Chain |
| Guocheng Mining vs. Pengxin International Mining | Guocheng Mining vs. Western Metal Materials | Guocheng Mining vs. Shengda Mining Co | Guocheng Mining vs. Maoming Petro Chemical Shihua |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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