Correlation Between Beijing Sanyuan and Suzhou Weizhixiang
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Beijing Sanyuan and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Suzhou Weizhixiang.
Diversification Opportunities for Beijing Sanyuan and Suzhou Weizhixiang
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Suzhou is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Suzhou Weizhixiang
Assuming the 90 days trading horizon Beijing Sanyuan is expected to generate 26.16 times less return on investment than Suzhou Weizhixiang. But when comparing it to its historical volatility, Beijing Sanyuan Foods is 1.92 times less risky than Suzhou Weizhixiang. It trades about 0.01 of its potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Suzhou Weizhixiang Food on August 29, 2024 and sell it today you would earn a total of 153.00 from holding Suzhou Weizhixiang Food or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Suzhou Weizhixiang Food |
Beijing Sanyuan and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Suzhou Weizhixiang
The main advantage of trading using opposite Beijing Sanyuan and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang'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 |
| Suzhou Weizhixiang vs. China Petroleum Chemical | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. China State Construction | Suzhou Weizhixiang 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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