Correlation Between Hua Xia and Beijing Yanjing
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By analyzing existing cross correlation between Hua Xia Bank and Beijing Yanjing Brewery, you can compare the effects of market volatilities on Hua Xia and Beijing Yanjing 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 Hua Xia with a short position of Beijing Yanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Beijing Yanjing.
Diversification Opportunities for Hua Xia and Beijing Yanjing
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hua and Beijing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and Hua Xia 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 Hua Xia Bank are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of Hua Xia i.e., Hua Xia and Beijing Yanjing go up and down completely randomly.
Pair Corralation between Hua Xia and Beijing Yanjing
Assuming the 90 days trading horizon Hua Xia Bank is expected to under-perform the Beijing Yanjing. But the stock apears to be less risky and, when comparing its historical volatility, Hua Xia Bank is 1.21 times less risky than Beijing Yanjing. The stock trades about -0.08 of its potential returns per unit of risk. The Beijing Yanjing Brewery is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,082 in Beijing Yanjing Brewery on October 12, 2024 and sell it today you would earn a total of 74.00 from holding Beijing Yanjing Brewery or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Beijing Yanjing Brewery
Performance |
| Timeline |
| Hua Xia Bank |
| Beijing Yanjing Brewery |
Hua Xia and Beijing Yanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Beijing Yanjing
The main advantage of trading using opposite Hua Xia and Beijing Yanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Beijing Yanjing 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 Yanjing will offset losses from the drop in Beijing Yanjing's long position.| Hua Xia vs. Bohai Leasing Co | Hua Xia vs. Easyhome New Retail | Hua Xia vs. Ningbo Construction Co | Hua Xia vs. Sinomach General Machinery |
| Beijing Yanjing vs. Hua Xia Bank | Beijing Yanjing vs. Anhui Transport Consulting | Beijing Yanjing vs. Xiamen Bank Co | Beijing Yanjing vs. Agricultural Bank of |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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