Correlation Between Jiangsu Broadcasting and Beijing Wantai
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By analyzing existing cross correlation between Jiangsu Broadcasting Cable and Beijing Wantai Biological, you can compare the effects of market volatilities on Jiangsu Broadcasting 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 Jiangsu Broadcasting with a short position of Beijing Wantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Broadcasting and Beijing Wantai.
Diversification Opportunities for Jiangsu Broadcasting and Beijing Wantai
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Beijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Broadcasting Cable 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 Jiangsu Broadcasting 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 Jiangsu Broadcasting Cable 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 Jiangsu Broadcasting i.e., Jiangsu Broadcasting and Beijing Wantai go up and down completely randomly.
Pair Corralation between Jiangsu Broadcasting and Beijing Wantai
Assuming the 90 days trading horizon Jiangsu Broadcasting Cable is expected to generate 0.9 times more return on investment than Beijing Wantai. However, Jiangsu Broadcasting Cable is 1.11 times less risky than Beijing Wantai. It trades about 0.02 of its potential returns per unit of risk. Beijing Wantai Biological is currently generating about -0.01 per unit of risk. If you would invest 303.00 in Jiangsu Broadcasting Cable on November 7, 2024 and sell it today you would earn a total of 18.00 from holding Jiangsu Broadcasting Cable or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Broadcasting Cable vs. Beijing Wantai Biological
Performance |
| Timeline |
| Jiangsu Broadcasting |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beijing Wantai Biological |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangsu Broadcasting and Beijing Wantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Broadcasting and Beijing Wantai
The main advantage of trading using opposite Jiangsu Broadcasting and Beijing Wantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Broadcasting 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.The idea behind Jiangsu Broadcasting Cable and Beijing Wantai Biological 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.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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