Correlation Between Beijing Tiantan and Sichuan Fulin
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By analyzing existing cross correlation between Beijing Tiantan Biological and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Beijing Tiantan and Sichuan Fulin 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 Tiantan with a short position of Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Tiantan and Sichuan Fulin.
Diversification Opportunities for Beijing Tiantan and Sichuan Fulin
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Sichuan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Tiantan Biological and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp and Beijing Tiantan 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 Tiantan Biological are associated (or correlated) with Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Beijing Tiantan i.e., Beijing Tiantan and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Beijing Tiantan and Sichuan Fulin
Assuming the 90 days trading horizon Beijing Tiantan Biological is expected to under-perform the Sichuan Fulin. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Tiantan Biological is 1.42 times less risky than Sichuan Fulin. The stock trades about -0.05 of its potential returns per unit of risk. The Sichuan Fulin Transportation is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 749.00 in Sichuan Fulin Transportation on September 14, 2024 and sell it today you would earn a total of 73.00 from holding Sichuan Fulin Transportation or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Beijing Tiantan Biological vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Beijing Tiantan Biol |
| Sichuan Fulin Transp |
Beijing Tiantan and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Tiantan and Sichuan Fulin
The main advantage of trading using opposite Beijing Tiantan and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Tiantan position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Beijing Tiantan vs. Industrial and Commercial | Beijing Tiantan vs. China Construction Bank | Beijing Tiantan vs. Bank of China | Beijing Tiantan vs. Agricultural Bank of |
| Sichuan Fulin vs. Ming Yang Smart | Sichuan Fulin vs. 159681 | Sichuan Fulin vs. 159005 | Sichuan Fulin vs. Loctek Ergonomic Technology |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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