Correlation Between Beijing Wantai and PKU HealthCare
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By analyzing existing cross correlation between Beijing Wantai Biological and PKU HealthCare Corp, you can compare the effects of market volatilities on Beijing Wantai and PKU HealthCare 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 PKU HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and PKU HealthCare.
Diversification Opportunities for Beijing Wantai and PKU HealthCare
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and PKU is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and PKU HealthCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKU HealthCare Corp 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 PKU HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKU HealthCare Corp has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and PKU HealthCare go up and down completely randomly.
Pair Corralation between Beijing Wantai and PKU HealthCare
Assuming the 90 days trading horizon Beijing Wantai is expected to generate 2.28 times less return on investment than PKU HealthCare. But when comparing it to its historical volatility, Beijing Wantai Biological is 1.21 times less risky than PKU HealthCare. It trades about 0.04 of its potential returns per unit of risk. PKU HealthCare Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 620.00 in PKU HealthCare Corp on September 3, 2024 and sell it today you would earn a total of 21.00 from holding PKU HealthCare Corp or generate 3.39% 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. PKU HealthCare Corp
Performance |
| Timeline |
| Beijing Wantai Biological |
| PKU HealthCare Corp |
Beijing Wantai and PKU HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and PKU HealthCare
The main advantage of trading using opposite Beijing Wantai and PKU HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, PKU HealthCare 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 PKU HealthCare will offset losses from the drop in PKU HealthCare's long position.| Beijing Wantai vs. Cofoe Medical Technology | Beijing Wantai vs. Guangzhou Boji Medical | Beijing Wantai vs. Qingdao Baheal Medical | Beijing Wantai vs. Double Medical Technology |
| PKU HealthCare vs. Chengdu Kanghua Biological | PKU HealthCare vs. Beijing Wantai Biological | PKU HealthCare vs. Suzhou Novoprotein Scientific | PKU HealthCare vs. Aluminum Corp of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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