Correlation Between China State and Beijing Sanyuan
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By analyzing existing cross correlation between China State Construction and Beijing Sanyuan Foods, you can compare the effects of market volatilities on China State and Beijing Sanyuan 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 Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Beijing Sanyuan.
Diversification Opportunities for China State and Beijing Sanyuan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Beijing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods 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 Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of China State i.e., China State and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between China State and Beijing Sanyuan
Assuming the 90 days trading horizon China State Construction is expected to generate 1.17 times more return on investment than Beijing Sanyuan. However, China State is 1.17 times more volatile than Beijing Sanyuan Foods. It trades about 0.04 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about 0.02 per unit of risk. If you would invest 532.00 in China State Construction on August 25, 2024 and sell it today you would earn a total of 63.00 from holding China State Construction or generate 11.84% 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 Sanyuan Foods
Performance |
| Timeline |
| China State Construction |
| Beijing Sanyuan Foods |
China State and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Beijing Sanyuan
The main advantage of trading using opposite China State and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Beijing Sanyuan 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 Sanyuan will offset losses from the drop in Beijing Sanyuan'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 Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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