Correlation Between Guangxi Wuzhou and Beijing Sanyuan
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and Beijing Sanyuan Foods, you can compare the effects of market volatilities on Guangxi Wuzhou and Beijing Sanyuan 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 Guangxi Wuzhou with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and Beijing Sanyuan.
Diversification Opportunities for Guangxi Wuzhou and Beijing Sanyuan
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangxi and Beijing is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and Guangxi Wuzhou 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 Guangxi Wuzhou Communications are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and Beijing Sanyuan
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to generate 1.48 times more return on investment than Beijing Sanyuan. However, Guangxi Wuzhou is 1.48 times more volatile than Beijing Sanyuan Foods. It trades about 0.03 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about 0.02 per unit of risk. If you would invest 381.00 in Guangxi Wuzhou Communications on November 5, 2024 and sell it today you would earn a total of 53.00 from holding Guangxi Wuzhou Communications or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| Beijing Sanyuan Foods |
Guangxi Wuzhou and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and Beijing Sanyuan
The main advantage of trading using opposite Guangxi Wuzhou and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, Beijing Sanyuan 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 Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| Guangxi Wuzhou vs. China Life Insurance | Guangxi Wuzhou vs. XinJiang GuoTong Pipeline | Guangxi Wuzhou vs. Dongfeng Automobile Co | Guangxi Wuzhou vs. Ping An Insurance |
| Beijing Sanyuan vs. China Longyuan Power | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. Guangxi Guiguan Electric | Beijing Sanyuan vs. Yantai North Andre |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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