Correlation Between China State and Beijing Bashi
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By analyzing existing cross correlation between China State Construction and Beijing Bashi Media, you can compare the effects of market volatilities on China State and Beijing Bashi 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 State with a short position of Beijing Bashi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Beijing Bashi.
Diversification Opportunities for China State and Beijing Bashi
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Beijing is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media and China State 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 State Construction are associated (or correlated) with Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of China State i.e., China State and Beijing Bashi go up and down completely randomly.
Pair Corralation between China State and Beijing Bashi
Assuming the 90 days trading horizon China State is expected to generate 1.98 times less return on investment than Beijing Bashi. But when comparing it to its historical volatility, China State Construction is 1.84 times less risky than Beijing Bashi. It trades about 0.04 of its potential returns per unit of risk. Beijing Bashi Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 352.00 in Beijing Bashi Media on August 25, 2024 and sell it today you would earn a total of 64.00 from holding Beijing Bashi Media or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Beijing Bashi Media
Performance |
| Timeline |
| China State Construction |
| Beijing Bashi Media |
China State and Beijing Bashi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Beijing Bashi
The main advantage of trading using opposite China State and Beijing Bashi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Beijing Bashi 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 Bashi will offset losses from the drop in Beijing Bashi's long position.| China State vs. Tongxing Environmental Protection | China State vs. Youyou Foods Co | China State vs. Shantou Wanshun Package | China State vs. Suzhou Weizhixiang Food |
| Beijing Bashi vs. China Petroleum Chemical | Beijing Bashi vs. PetroChina Co Ltd | Beijing Bashi vs. China State Construction | Beijing Bashi 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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