Correlation Between Beijing Wantai and China Reform
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By analyzing existing cross correlation between Beijing Wantai Biological and China Reform Health, you can compare the effects of market volatilities on Beijing Wantai and China Reform 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 Wantai with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and China Reform.
Diversification Opportunities for Beijing Wantai and China Reform
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and China is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Beijing Wantai 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 Wantai Biological are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and China Reform go up and down completely randomly.
Pair Corralation between Beijing Wantai and China Reform
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 0.95 times more return on investment than China Reform. However, Beijing Wantai Biological is 1.05 times less risky than China Reform. It trades about -0.17 of its potential returns per unit of risk. China Reform Health is currently generating about -0.37 per unit of risk. If you would invest 7,395 in Beijing Wantai Biological on October 24, 2024 and sell it today you would lose (555.00) from holding Beijing Wantai Biological or give up 7.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. China Reform Health
Performance |
| Timeline |
| Beijing Wantai Biological |
| China Reform Health |
Beijing Wantai and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and China Reform
The main advantage of trading using opposite Beijing Wantai and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| Beijing Wantai vs. Shenyang Chemical Industry | Beijing Wantai vs. Tongyu Communication | Beijing Wantai vs. Anhui Jianghuai Automobile | Beijing Wantai vs. Haima Automobile Group |
| China Reform vs. Servyou Software Group | China Reform vs. Mango Excellent Media | China Reform vs. Shuhua Sports Co | China Reform vs. China National Software |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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