Correlation Between Beijing Sanyuan and Jiangsu Phoenix

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Can any of the company-specific risk be diversified away by investing in both Beijing Sanyuan and Jiangsu Phoenix at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Beijing Sanyuan and Jiangsu Phoenix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Sanyuan Foods and Jiangsu Phoenix Publishing, you can compare the effects of market volatilities on Beijing Sanyuan and Jiangsu Phoenix 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 Jiangsu Phoenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Jiangsu Phoenix.

Diversification Opportunities for Beijing Sanyuan and Jiangsu Phoenix

BeijingJiangsuDiversified AwayBeijingJiangsuDiversified Away100%
0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between Beijing and Jiangsu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Jiangsu Phoenix Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Phoenix Publ 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 Jiangsu Phoenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Phoenix Publ has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and Jiangsu Phoenix go up and down completely randomly.

Pair Corralation between Beijing Sanyuan and Jiangsu Phoenix

If you would invest  1,102  in Jiangsu Phoenix Publishing on November 23, 2024 and sell it today you would lose (7.00) from holding Jiangsu Phoenix Publishing or give up 0.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Beijing Sanyuan Foods  vs.  Jiangsu Phoenix Publishing

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.15600429 601928
       Timeline  
Beijing Sanyuan Foods 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Beijing Sanyuan Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beijing Sanyuan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44.555.5
Jiangsu Phoenix Publ 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Phoenix Publishing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangsu Phoenix may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.51111.512

Beijing Sanyuan and Jiangsu Phoenix Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.95-2.96-1.97-0.980.00.951.922.893.85 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15600429 601928
       Returns  

Pair Trading with Beijing Sanyuan and Jiangsu Phoenix

The main advantage of trading using opposite Beijing Sanyuan and Jiangsu Phoenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, Jiangsu Phoenix 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 Jiangsu Phoenix will offset losses from the drop in Jiangsu Phoenix's long position.
The idea behind Beijing Sanyuan Foods and Jiangsu Phoenix Publishing 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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