Correlation Between Chongqing Brewery and Beijing Roborock
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By analyzing existing cross correlation between Chongqing Brewery Co and Beijing Roborock Technology, you can compare the effects of market volatilities on Chongqing Brewery and Beijing Roborock 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 Chongqing Brewery with a short position of Beijing Roborock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Beijing Roborock.
Diversification Opportunities for Chongqing Brewery and Beijing Roborock
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chongqing and Beijing is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Beijing Roborock Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Roborock Tec and Chongqing Brewery 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 Chongqing Brewery Co are associated (or correlated) with Beijing Roborock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Roborock Tec has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Beijing Roborock go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Beijing Roborock
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Beijing Roborock. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Brewery Co is 1.52 times less risky than Beijing Roborock. The stock trades about -0.07 of its potential returns per unit of risk. The Beijing Roborock Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24,689 in Beijing Roborock Technology on November 28, 2024 and sell it today you would earn a total of 1,321 from holding Beijing Roborock Technology or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Beijing Roborock Technology
Performance |
| Timeline |
| Chongqing Brewery |
| Beijing Roborock Tec |
Chongqing Brewery and Beijing Roborock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Beijing Roborock
The main advantage of trading using opposite Chongqing Brewery and Beijing Roborock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Beijing Roborock 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 Roborock will offset losses from the drop in Beijing Roborock's long position.The idea behind Chongqing Brewery Co and Beijing Roborock Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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