Correlation Between Gansu Jiu and Beijing Bashi
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By analyzing existing cross correlation between Gansu Jiu Steel and Beijing Bashi Media, you can compare the effects of market volatilities on Gansu Jiu and Beijing Bashi 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 Gansu Jiu with a short position of Beijing Bashi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Beijing Bashi.
Diversification Opportunities for Gansu Jiu and Beijing Bashi
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Beijing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Beijing Bashi go up and down completely randomly.
Pair Corralation between Gansu Jiu and Beijing Bashi
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 2.14 times less return on investment than Beijing Bashi. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.68 times less risky than Beijing Bashi. It trades about 0.02 of its potential returns per unit of risk. Beijing Bashi Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Beijing Bashi Media on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Beijing Bashi Media or generate 21.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Beijing Bashi Media
Performance |
| Timeline |
| Gansu Jiu Steel |
| Beijing Bashi Media |
Gansu Jiu and Beijing Bashi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Beijing Bashi
The main advantage of trading using opposite Gansu Jiu and Beijing Bashi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Beijing Bashi 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 Bashi will offset losses from the drop in Beijing Bashi's long position.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
| Beijing Bashi vs. Lutian Machinery Co | Beijing Bashi vs. PetroChina Co Ltd | Beijing Bashi vs. Bank of China | Beijing Bashi vs. Gansu Jiu Steel |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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