Correlation Between Beijing Wantai and Hunan Investment
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By analyzing existing cross correlation between Beijing Wantai Biological and Hunan Investment Group, you can compare the effects of market volatilities on Beijing Wantai and Hunan Investment 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 Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Hunan Investment.
Diversification Opportunities for Beijing Wantai and Hunan Investment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Hunan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment 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 Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Hunan Investment go up and down completely randomly.
Pair Corralation between Beijing Wantai and Hunan Investment
Assuming the 90 days trading horizon Beijing Wantai is expected to generate 9.59 times less return on investment than Hunan Investment. But when comparing it to its historical volatility, Beijing Wantai Biological is 1.03 times less risky than Hunan Investment. It trades about 0.01 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Hunan Investment Group on September 1, 2024 and sell it today you would earn a total of 159.00 from holding Hunan Investment Group or generate 38.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. Hunan Investment Group
Performance |
| Timeline |
| Beijing Wantai Biological |
| Hunan Investment |
Beijing Wantai and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Hunan Investment
The main advantage of trading using opposite Beijing Wantai and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Beijing Wantai vs. Jiangsu Xinri E Vehicle | Beijing Wantai vs. CareRay Digital Medical | Beijing Wantai vs. Changchun Engley Automobile | Beijing Wantai vs. Kontour Medical Technology |
| Hunan Investment vs. Jiangsu Phoenix Publishing | Hunan Investment vs. Union Semiconductor Co | Hunan Investment vs. China Publishing Media | Hunan Investment vs. GigaDevice SemiconductorBeiji |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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