Correlation Between Changjiang Jinggong and Beijing SPC
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Beijing SPC Environment, you can compare the effects of market volatilities on Changjiang Jinggong and Beijing SPC 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 Changjiang Jinggong with a short position of Beijing SPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Beijing SPC.
Diversification Opportunities for Changjiang Jinggong and Beijing SPC
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changjiang and Beijing is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Beijing SPC Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing SPC Environment and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Beijing SPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing SPC Environment has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Beijing SPC go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Beijing SPC
Assuming the 90 days trading horizon Changjiang Jinggong Steel is expected to generate 1.01 times more return on investment than Beijing SPC. However, Changjiang Jinggong is 1.01 times more volatile than Beijing SPC Environment. It trades about 0.06 of its potential returns per unit of risk. Beijing SPC Environment is currently generating about -0.04 per unit of risk. If you would invest 295.00 in Changjiang Jinggong Steel on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Changjiang Jinggong Steel or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Jinggong Steel vs. Beijing SPC Environment
Performance |
| Timeline |
| Changjiang Jinggong Steel |
| Beijing SPC Environment |
Changjiang Jinggong and Beijing SPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Jinggong and Beijing SPC
The main advantage of trading using opposite Changjiang Jinggong and Beijing SPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Beijing SPC 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 SPC will offset losses from the drop in Beijing SPC's long position.The idea behind Changjiang Jinggong Steel and Beijing SPC Environment 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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