Correlation Between Weihai Honglin and Beijing Wandong
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By analyzing existing cross correlation between Weihai Honglin Electronic and Beijing Wandong Medical, you can compare the effects of market volatilities on Weihai Honglin and Beijing Wandong 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 Weihai Honglin with a short position of Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Beijing Wandong.
Diversification Opportunities for Weihai Honglin and Beijing Wandong
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weihai and Beijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Beijing Wandong go up and down completely randomly.
Pair Corralation between Weihai Honglin and Beijing Wandong
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to under-perform the Beijing Wandong. In addition to that, Weihai Honglin is 1.19 times more volatile than Beijing Wandong Medical. It trades about -0.01 of its total potential returns per unit of risk. Beijing Wandong Medical is currently generating about -0.01 per unit of volatility. If you would invest 2,002 in Beijing Wandong Medical on August 31, 2024 and sell it today you would lose (289.00) from holding Beijing Wandong Medical or give up 14.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Beijing Wandong Medical
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Beijing Wandong Medical |
Weihai Honglin and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Beijing Wandong
The main advantage of trading using opposite Weihai Honglin and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Beijing Wandong 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 Wandong will offset losses from the drop in Beijing Wandong's long position.| Weihai Honglin vs. Cultural Investment Holdings | Weihai Honglin vs. Gome Telecom Equipment | Weihai Honglin vs. Bus Online Co | Weihai Honglin vs. Holitech Technology Co |
| Beijing Wandong vs. Tongding Interconnection Information | Beijing Wandong vs. ZYF Lopsking Aluminum | Beijing Wandong vs. Emdoor Information Co | Beijing Wandong vs. Westone Information Industry |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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