Correlation Between Beijing Sanyuan and FSPG Hi-Tech
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By analyzing existing cross correlation between Beijing Sanyuan Foods and FSPG Hi Tech Co, you can compare the effects of market volatilities on Beijing Sanyuan and FSPG Hi-Tech 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 Sanyuan with a short position of FSPG Hi-Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and FSPG Hi-Tech.
Diversification Opportunities for Beijing Sanyuan and FSPG Hi-Tech
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beijing and FSPG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and FSPG Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSPG Hi Tech and Beijing Sanyuan 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 Sanyuan Foods are associated (or correlated) with FSPG Hi-Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSPG Hi Tech has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and FSPG Hi-Tech go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and FSPG Hi-Tech
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to under-perform the FSPG Hi-Tech. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Sanyuan Foods is 1.51 times less risky than FSPG Hi-Tech. The stock trades about 0.0 of its potential returns per unit of risk. The FSPG Hi Tech Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 559.00 in FSPG Hi Tech Co on November 7, 2024 and sell it today you would earn a total of 7.00 from holding FSPG Hi Tech Co or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. FSPG Hi Tech Co
Performance |
| Timeline |
| Beijing Sanyuan Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FSPG Hi Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Beijing Sanyuan and FSPG Hi-Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and FSPG Hi-Tech
The main advantage of trading using opposite Beijing Sanyuan and FSPG Hi-Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, FSPG Hi-Tech 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 FSPG Hi-Tech will offset losses from the drop in FSPG Hi-Tech's long position.The idea behind Beijing Sanyuan Foods and FSPG Hi Tech Co 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.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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