Correlation Between Xinjiang Tianrun and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Xinjiang Tianrun Dairy and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Xinjiang Tianrun and Beijing HuaYuanYiTong 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 Xinjiang Tianrun with a short position of Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Tianrun and Beijing HuaYuanYiTong.
Diversification Opportunities for Xinjiang Tianrun and Beijing HuaYuanYiTong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Beijing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Tianrun Dairy and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong and Xinjiang Tianrun 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 Xinjiang Tianrun Dairy are associated (or correlated) with Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Xinjiang Tianrun i.e., Xinjiang Tianrun and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Xinjiang Tianrun and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Xinjiang Tianrun Dairy is expected to under-perform the Beijing HuaYuanYiTong. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Tianrun Dairy is 1.49 times less risky than Beijing HuaYuanYiTong. The stock trades about -0.04 of its potential returns per unit of risk. The Beijing HuaYuanYiTong Thermal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 933.00 in Beijing HuaYuanYiTong Thermal on August 28, 2024 and sell it today you would earn a total of 294.00 from holding Beijing HuaYuanYiTong Thermal or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Tianrun Dairy vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Xinjiang Tianrun Dairy |
| Beijing HuaYuanYiTong |
Xinjiang Tianrun and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Tianrun and Beijing HuaYuanYiTong
The main advantage of trading using opposite Xinjiang Tianrun and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Tianrun position performs unexpectedly, Beijing HuaYuanYiTong 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 HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Xinjiang Tianrun vs. Kweichow Moutai Co | Xinjiang Tianrun vs. Shenzhen Mindray Bio Medical | Xinjiang Tianrun vs. Jiangsu Pacific Quartz | Xinjiang Tianrun vs. G bits Network Technology |
| Beijing HuaYuanYiTong vs. China Petroleum Chemical | Beijing HuaYuanYiTong vs. PetroChina Co Ltd | Beijing HuaYuanYiTong vs. China State Construction | Beijing HuaYuanYiTong vs. China Railway Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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