Correlation Between China Marine and Beijing Yanjing
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By analyzing existing cross correlation between China Marine Information and Beijing Yanjing Brewery, you can compare the effects of market volatilities on China Marine and Beijing Yanjing 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 China Marine with a short position of Beijing Yanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Marine and Beijing Yanjing.
Diversification Opportunities for China Marine and Beijing Yanjing
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Beijing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Marine Information and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and China Marine 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 China Marine Information are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of China Marine i.e., China Marine and Beijing Yanjing go up and down completely randomly.
Pair Corralation between China Marine and Beijing Yanjing
Assuming the 90 days trading horizon China Marine Information is expected to generate 1.45 times more return on investment than Beijing Yanjing. However, China Marine is 1.45 times more volatile than Beijing Yanjing Brewery. It trades about 0.01 of its potential returns per unit of risk. Beijing Yanjing Brewery is currently generating about -0.02 per unit of risk. If you would invest 2,676 in China Marine Information on August 28, 2024 and sell it today you would lose (6.00) from holding China Marine Information or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Marine Information vs. Beijing Yanjing Brewery
Performance |
| Timeline |
| China Marine Information |
| Beijing Yanjing Brewery |
China Marine and Beijing Yanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Marine and Beijing Yanjing
The main advantage of trading using opposite China Marine and Beijing Yanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Marine position performs unexpectedly, Beijing Yanjing 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 Yanjing will offset losses from the drop in Beijing Yanjing's long position.| China Marine vs. Cambricon Technologies Corp | China Marine vs. Loongson Technology Corp | China Marine vs. Chongqing Road Bridge | China Marine vs. Shenzhen Fortune Trend |
| Beijing Yanjing vs. China Petroleum Chemical | Beijing Yanjing vs. PetroChina Co Ltd | Beijing Yanjing vs. China State Construction | Beijing Yanjing 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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