Correlation Between Pengxin International and Beijing Cisri
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By analyzing existing cross correlation between Pengxin International Mining and Beijing Cisri Gaona, you can compare the effects of market volatilities on Pengxin International and Beijing Cisri 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 Pengxin International with a short position of Beijing Cisri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Beijing Cisri.
Diversification Opportunities for Pengxin International and Beijing Cisri
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pengxin and Beijing is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Beijing Cisri Gaona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Cisri Gaona and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Beijing Cisri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Cisri Gaona has no effect on the direction of Pengxin International i.e., Pengxin International and Beijing Cisri go up and down completely randomly.
Pair Corralation between Pengxin International and Beijing Cisri
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 1.16 times more return on investment than Beijing Cisri. However, Pengxin International is 1.16 times more volatile than Beijing Cisri Gaona. It trades about 0.01 of its potential returns per unit of risk. Beijing Cisri Gaona is currently generating about -0.04 per unit of risk. If you would invest 322.00 in Pengxin International Mining on October 16, 2024 and sell it today you would lose (23.00) from holding Pengxin International Mining or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Beijing Cisri Gaona
Performance |
| Timeline |
| Pengxin International |
| Beijing Cisri Gaona |
Pengxin International and Beijing Cisri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Beijing Cisri
The main advantage of trading using opposite Pengxin International and Beijing Cisri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Beijing Cisri 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 Cisri will offset losses from the drop in Beijing Cisri's long position.The idea behind Pengxin International Mining and Beijing Cisri Gaona 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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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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