Correlation Between Beijing Jiaman and Inner Mongolia
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By analyzing existing cross correlation between Beijing Jiaman Dress and Inner Mongolia BaoTou, you can compare the effects of market volatilities on Beijing Jiaman and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Jiaman and Inner Mongolia.
Diversification Opportunities for Beijing Jiaman and Inner Mongolia
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Inner is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Jiaman Dress and Inner Mongolia BaoTou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia BaoTou 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia BaoTou has no effect on the direction of Beijing Jiaman i.e., Beijing Jiaman and Inner Mongolia go up and down completely randomly.
Pair Corralation between Beijing Jiaman and Inner Mongolia
Assuming the 90 days trading horizon Beijing Jiaman Dress is expected to under-perform the Inner Mongolia. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Jiaman Dress is 1.53 times less risky than Inner Mongolia. The stock trades about -0.07 of its potential returns per unit of risk. The Inner Mongolia BaoTou is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Inner Mongolia BaoTou on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Inner Mongolia BaoTou or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Jiaman Dress vs. Inner Mongolia BaoTou
Performance |
| Timeline |
| Beijing Jiaman Dress |
| Inner Mongolia BaoTou |
Beijing Jiaman and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Jiaman and Inner Mongolia
The main advantage of trading using opposite Beijing Jiaman and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Jiaman position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| Beijing Jiaman vs. PetroChina Co Ltd | Beijing Jiaman vs. China Mobile Limited | Beijing Jiaman vs. Industrial and Commercial | Beijing Jiaman vs. China Life Insurance |
| Inner Mongolia vs. Zijin Mining Group | Inner Mongolia vs. Baoshan Iron Steel | Inner Mongolia vs. Rongsheng Petrochemical Co | Inner Mongolia vs. Hoshine Silicon Ind |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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