Correlation Between Beijing Wandong and China Reform
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By analyzing existing cross correlation between Beijing Wandong Medical and China Reform Health, you can compare the effects of market volatilities on Beijing Wandong and China Reform 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 Wandong with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and China Reform.
Diversification Opportunities for Beijing Wandong and China Reform
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Beijing Wandong 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 Wandong Medical are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Beijing Wandong i.e., Beijing Wandong and China Reform go up and down completely randomly.
Pair Corralation between Beijing Wandong and China Reform
Assuming the 90 days trading horizon Beijing Wandong is expected to generate 2.54 times less return on investment than China Reform. But when comparing it to its historical volatility, Beijing Wandong Medical is 1.63 times less risky than China Reform. It trades about 0.09 of its potential returns per unit of risk. China Reform Health is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 710.00 in China Reform Health on September 15, 2024 and sell it today you would earn a total of 562.00 from holding China Reform Health or generate 79.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wandong Medical vs. China Reform Health
Performance |
| Timeline |
| Beijing Wandong Medical |
| China Reform Health |
Beijing Wandong and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wandong and China Reform
The main advantage of trading using opposite Beijing Wandong and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| Beijing Wandong vs. Duzhe Publishing Media | Beijing Wandong vs. Threes Company Media | Beijing Wandong vs. Zoy Home Furnishing | Beijing Wandong vs. Suofeiya Home Collection |
| China Reform vs. Jiangsu Jinling Sports | China Reform vs. V V Food | China Reform vs. Anji Foodstuff Co | China Reform vs. Shandong Polymer Biochemicals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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