Correlation Between Hefei Metalforming and Beijing Capital
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By analyzing existing cross correlation between Hefei Metalforming Mach and Beijing Capital Co, you can compare the effects of market volatilities on Hefei Metalforming and Beijing Capital 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 Hefei Metalforming with a short position of Beijing Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Beijing Capital.
Diversification Opportunities for Hefei Metalforming and Beijing Capital
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hefei and Beijing is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Beijing Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Capital and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with Beijing Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Capital has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Beijing Capital go up and down completely randomly.
Pair Corralation between Hefei Metalforming and Beijing Capital
Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to generate 2.67 times more return on investment than Beijing Capital. However, Hefei Metalforming is 2.67 times more volatile than Beijing Capital Co. It trades about 0.03 of its potential returns per unit of risk. Beijing Capital Co is currently generating about 0.04 per unit of risk. If you would invest 670.00 in Hefei Metalforming Mach on September 3, 2024 and sell it today you would earn a total of 109.00 from holding Hefei Metalforming Mach or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. Beijing Capital Co
Performance |
| Timeline |
| Hefei Metalforming Mach |
| Beijing Capital |
Hefei Metalforming and Beijing Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and Beijing Capital
The main advantage of trading using opposite Hefei Metalforming and Beijing Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, Beijing Capital 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 Capital will offset losses from the drop in Beijing Capital's long position.| Hefei Metalforming vs. Cultural Investment Holdings | Hefei Metalforming vs. Gome Telecom Equipment | Hefei Metalforming vs. Bus Online Co | Hefei Metalforming vs. Holitech Technology Co |
| Beijing Capital vs. Chengtun Mining Group | Beijing Capital vs. Sportsoul Co Ltd | Beijing Capital vs. Hainan Mining Co | Beijing Capital vs. Hefei Metalforming Mach |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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