Correlation Between Beijing Jiaman and Hangzhou Gaoxin
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By analyzing existing cross correlation between Beijing Jiaman Dress and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Beijing Jiaman and Hangzhou Gaoxin 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 Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Jiaman and Hangzhou Gaoxin.
Diversification Opportunities for Beijing Jiaman and Hangzhou Gaoxin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Hangzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Jiaman Dress and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber 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 Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Beijing Jiaman i.e., Beijing Jiaman and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Beijing Jiaman and Hangzhou Gaoxin
Assuming the 90 days trading horizon Beijing Jiaman is expected to generate 12.83 times less return on investment than Hangzhou Gaoxin. But when comparing it to its historical volatility, Beijing Jiaman Dress is 1.47 times less risky than Hangzhou Gaoxin. It trades about 0.0 of its potential returns per unit of risk. Hangzhou Gaoxin Rubber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,011 in Hangzhou Gaoxin Rubber on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Hangzhou Gaoxin Rubber or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Jiaman Dress vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Beijing Jiaman Dress |
| Hangzhou Gaoxin Rubber |
Beijing Jiaman and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Jiaman and Hangzhou Gaoxin
The main advantage of trading using opposite Beijing Jiaman and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Jiaman position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.| Beijing Jiaman vs. Jointo Energy Investment | Beijing Jiaman vs. Shaanxi Broadcast TV | Beijing Jiaman vs. Xiandai Investment Co | Beijing Jiaman vs. Xinjiang Beixin RoadBridge |
| Hangzhou Gaoxin vs. Zijin Mining Group | Hangzhou Gaoxin vs. Wanhua Chemical Group | Hangzhou Gaoxin vs. Baoshan Iron Steel | Hangzhou Gaoxin vs. Shandong Gold Mining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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