Correlation Between Beijing-Shanghai and Wuhan Tianyuan
Specify exactly 2 symbols:
By analyzing existing cross correlation between Beijing Shanghai High Speed and Wuhan Tianyuan Environmental, you can compare the effects of market volatilities on Beijing-Shanghai and Wuhan Tianyuan 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 Beijing-Shanghai with a short position of Wuhan Tianyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing-Shanghai and Wuhan Tianyuan.
Diversification Opportunities for Beijing-Shanghai and Wuhan Tianyuan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing-Shanghai and Wuhan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shanghai High Speed and Wuhan Tianyuan Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Tianyuan Envir and Beijing-Shanghai 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 Beijing Shanghai High Speed are associated (or correlated) with Wuhan Tianyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Tianyuan Envir has no effect on the direction of Beijing-Shanghai i.e., Beijing-Shanghai and Wuhan Tianyuan go up and down completely randomly.
Pair Corralation between Beijing-Shanghai and Wuhan Tianyuan
Assuming the 90 days trading horizon Beijing Shanghai High Speed is expected to under-perform the Wuhan Tianyuan. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Shanghai High Speed is 3.41 times less risky than Wuhan Tianyuan. The stock trades about -0.01 of its potential returns per unit of risk. The Wuhan Tianyuan Environmental is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,239 in Wuhan Tianyuan Environmental on November 8, 2024 and sell it today you would earn a total of 206.00 from holding Wuhan Tianyuan Environmental or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Beijing Shanghai High Speed vs. Wuhan Tianyuan Environmental
Performance |
| Timeline |
| Beijing Shanghai High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wuhan Tianyuan Envir |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Beijing-Shanghai and Wuhan Tianyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing-Shanghai and Wuhan Tianyuan
The main advantage of trading using opposite Beijing-Shanghai and Wuhan Tianyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing-Shanghai position performs unexpectedly, Wuhan Tianyuan 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 Wuhan Tianyuan will offset losses from the drop in Wuhan Tianyuan's long position.The idea behind Beijing Shanghai High Speed and Wuhan Tianyuan Environmental 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |