Correlation Between Beijing Wandong and China National
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By analyzing existing cross correlation between Beijing Wandong Medical and China National Software, you can compare the effects of market volatilities on Beijing Wandong and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and China National.
Diversification Opportunities for Beijing Wandong and China National
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and China is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Beijing Wandong i.e., Beijing Wandong and China National go up and down completely randomly.
Pair Corralation between Beijing Wandong and China National
Assuming the 90 days trading horizon Beijing Wandong is expected to generate 1.89 times less return on investment than China National. But when comparing it to its historical volatility, Beijing Wandong Medical is 1.82 times less risky than China National. It trades about 0.18 of its potential returns per unit of risk. China National Software is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,260 in China National Software on August 29, 2024 and sell it today you would earn a total of 960.00 from holding China National Software or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wandong Medical vs. China National Software
Performance |
| Timeline |
| Beijing Wandong Medical |
| China National Software |
Beijing Wandong and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wandong and China National
The main advantage of trading using opposite Beijing Wandong and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong position performs unexpectedly, China National 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 National will offset losses from the drop in China National'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 |
| China National vs. China State Construction | China National vs. Huafa Industrial Co | China National vs. China International Capital | China National vs. Kweichow Moutai Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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