Correlation Between Beijing Wandong and Contec Medical
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By analyzing existing cross correlation between Beijing Wandong Medical and Contec Medical Systems, you can compare the effects of market volatilities on Beijing Wandong and Contec Medical 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 Contec Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and Contec Medical.
Diversification Opportunities for Beijing Wandong and Contec Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Contec is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical and Contec Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contec Medical Systems 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 Contec Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contec Medical Systems has no effect on the direction of Beijing Wandong i.e., Beijing Wandong and Contec Medical go up and down completely randomly.
Pair Corralation between Beijing Wandong and Contec Medical
Assuming the 90 days trading horizon Beijing Wandong Medical is expected to generate 1.26 times more return on investment than Contec Medical. However, Beijing Wandong is 1.26 times more volatile than Contec Medical Systems. It trades about 0.18 of its potential returns per unit of risk. Contec Medical Systems is currently generating about -0.14 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wandong Medical vs. Contec Medical Systems
Performance |
| Timeline |
| Beijing Wandong Medical |
| Contec Medical Systems |
Beijing Wandong and Contec Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wandong and Contec Medical
The main advantage of trading using opposite Beijing Wandong and Contec Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong position performs unexpectedly, Contec Medical 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 Contec Medical will offset losses from the drop in Contec Medical'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 |
| Contec Medical vs. Industrial and Commercial | Contec Medical vs. China Construction Bank | Contec Medical vs. Agricultural Bank of | Contec Medical 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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