Correlation Between HeBei Jinniu and Beijing Wantai
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By analyzing existing cross correlation between HeBei Jinniu Chemical and Beijing Wantai Biological, you can compare the effects of market volatilities on HeBei Jinniu and Beijing Wantai 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 HeBei Jinniu with a short position of Beijing Wantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and Beijing Wantai.
Diversification Opportunities for HeBei Jinniu and Beijing Wantai
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HeBei and Beijing is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and Beijing Wantai Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wantai Biological and HeBei Jinniu 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 HeBei Jinniu Chemical are associated (or correlated) with Beijing Wantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wantai Biological has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and Beijing Wantai go up and down completely randomly.
Pair Corralation between HeBei Jinniu and Beijing Wantai
Assuming the 90 days trading horizon HeBei Jinniu Chemical is expected to generate 1.73 times more return on investment than Beijing Wantai. However, HeBei Jinniu is 1.73 times more volatile than Beijing Wantai Biological. It trades about 0.15 of its potential returns per unit of risk. Beijing Wantai Biological is currently generating about 0.02 per unit of risk. If you would invest 464.00 in HeBei Jinniu Chemical on September 2, 2024 and sell it today you would earn a total of 44.00 from holding HeBei Jinniu Chemical or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeBei Jinniu Chemical vs. Beijing Wantai Biological
Performance |
| Timeline |
| HeBei Jinniu Chemical |
| Beijing Wantai Biological |
HeBei Jinniu and Beijing Wantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeBei Jinniu and Beijing Wantai
The main advantage of trading using opposite HeBei Jinniu and Beijing Wantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, Beijing Wantai 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 Wantai will offset losses from the drop in Beijing Wantai's long position.| HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu vs. Shandong Gold Mining |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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