Correlation Between Beijing Sanyuan and Sichuan Teway
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Sichuan Teway Food, you can compare the effects of market volatilities on Beijing Sanyuan and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Sichuan Teway.
Diversification Opportunities for Beijing Sanyuan and Sichuan Teway
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Sichuan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and Sichuan Teway go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Sichuan Teway
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to under-perform the Sichuan Teway. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Sanyuan Foods is 1.53 times less risky than Sichuan Teway. The stock trades about 0.0 of its potential returns per unit of risk. The Sichuan Teway Food is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,368 in Sichuan Teway Food on August 25, 2024 and sell it today you would lose (33.00) from holding Sichuan Teway Food or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Sichuan Teway Food
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Sichuan Teway Food |
Beijing Sanyuan and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Sichuan Teway
The main advantage of trading using opposite Beijing Sanyuan and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway's long position.| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
| Sichuan Teway vs. China Petroleum Chemical | Sichuan Teway vs. PetroChina Co Ltd | Sichuan Teway vs. China State Construction | Sichuan Teway 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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