Correlation Between Beijing Wandong and Ningbo MedicalSystem
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By analyzing existing cross correlation between Beijing Wandong Medical and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Beijing Wandong and Ningbo MedicalSystem 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 Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and Ningbo MedicalSystem.
Diversification Opportunities for Beijing Wandong and Ningbo MedicalSystem
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Ningbo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem 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 Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Beijing Wandong i.e., Beijing Wandong and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Beijing Wandong and Ningbo MedicalSystem
Assuming the 90 days trading horizon Beijing Wandong Medical is expected to generate 1.15 times more return on investment than Ningbo MedicalSystem. However, Beijing Wandong is 1.15 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about 0.18 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about 0.03 per unit of risk. If you would invest 1,497 in Beijing Wandong Medical on August 29, 2024 and sell it today you would earn a total of 184.00 from holding Beijing Wandong Medical or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wandong Medical vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Beijing Wandong Medical |
| Ningbo MedicalSystem |
Beijing Wandong and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wandong and Ningbo MedicalSystem
The main advantage of trading using opposite Beijing Wandong and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong position performs unexpectedly, Ningbo MedicalSystem 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 Ningbo MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Beijing Wandong vs. Sunwave Communications Co | Beijing Wandong vs. Hubei Xingfa Chemicals | Beijing Wandong vs. Shandong Polymer Biochemicals | Beijing Wandong vs. 360 Security Technology |
| Ningbo MedicalSystem vs. Industrial and Commercial | Ningbo MedicalSystem vs. China Construction Bank | Ningbo MedicalSystem vs. Agricultural Bank of | Ningbo MedicalSystem vs. Bank of China |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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