Correlation Between Beijing Jiaman and Shenzhen Inovance
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By analyzing existing cross correlation between Beijing Jiaman Dress and Shenzhen Inovance Tech, you can compare the effects of market volatilities on Beijing Jiaman and Shenzhen Inovance 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 Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Jiaman and Shenzhen Inovance.
Diversification Opportunities for Beijing Jiaman and Shenzhen Inovance
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Shenzhen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Jiaman Dress and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech 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 Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of Beijing Jiaman i.e., Beijing Jiaman and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between Beijing Jiaman and Shenzhen Inovance
Assuming the 90 days trading horizon Beijing Jiaman Dress is expected to under-perform the Shenzhen Inovance. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Jiaman Dress is 1.01 times less risky than Shenzhen Inovance. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen Inovance Tech is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,141 in Shenzhen Inovance Tech on October 16, 2024 and sell it today you would lose (1,306) from holding Shenzhen Inovance Tech or give up 18.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Jiaman Dress vs. Shenzhen Inovance Tech
Performance |
| Timeline |
| Beijing Jiaman Dress |
| Shenzhen Inovance Tech |
Beijing Jiaman and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Jiaman and Shenzhen Inovance
The main advantage of trading using opposite Beijing Jiaman and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Jiaman position performs unexpectedly, Shenzhen Inovance 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 Shenzhen Inovance will offset losses from the drop in Shenzhen Inovance's long position.| Beijing Jiaman vs. Will Semiconductor Co | Beijing Jiaman vs. Guangdong Qunxing Toys | Beijing Jiaman vs. Kunwu Jiuding Investment | Beijing Jiaman vs. Zhejiang Kingland Pipeline |
| Shenzhen Inovance vs. Rising Nonferrous Metals | Shenzhen Inovance vs. Tibet Huayu Mining | Shenzhen Inovance vs. Beijing Jiaman Dress | Shenzhen Inovance vs. Anhui Jinhe Industrial |
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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