Correlation Between Beijing Capital and Bengang Steel
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By analyzing existing cross correlation between Beijing Capital Co and Bengang Steel Plates, you can compare the effects of market volatilities on Beijing Capital and Bengang Steel 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 Capital with a short position of Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Capital and Bengang Steel.
Diversification Opportunities for Beijing Capital and Bengang Steel
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beijing and Bengang is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Capital Co and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates and Beijing Capital 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 Capital Co are associated (or correlated) with Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Beijing Capital i.e., Beijing Capital and Bengang Steel go up and down completely randomly.
Pair Corralation between Beijing Capital and Bengang Steel
Assuming the 90 days trading horizon Beijing Capital is expected to generate 1.07 times less return on investment than Bengang Steel. But when comparing it to its historical volatility, Beijing Capital Co is 1.99 times less risky than Bengang Steel. It trades about 0.02 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Bengang Steel Plates on November 29, 2024 and sell it today you would lose (12.00) from holding Bengang Steel Plates or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Capital Co vs. Bengang Steel Plates
Performance |
| Timeline |
| Beijing Capital |
| Bengang Steel Plates |
Beijing Capital and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Capital and Bengang Steel
The main advantage of trading using opposite Beijing Capital and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Capital position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Beijing Capital vs. Xiamen Insight Investment | Beijing Capital vs. Zoje Resources Investment | Beijing Capital vs. Zhejiang Construction Investment | Beijing Capital vs. Zhongrun Resources Investment |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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