Correlation Between Beijing Wantai and Zhejiang Qianjiang
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By analyzing existing cross correlation between Beijing Wantai Biological and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Beijing Wantai and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Zhejiang Qianjiang.
Diversification Opportunities for Beijing Wantai and Zhejiang Qianjiang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Zhejiang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Beijing Wantai and Zhejiang Qianjiang
Assuming the 90 days trading horizon Beijing Wantai is expected to generate 1.75 times less return on investment than Zhejiang Qianjiang. But when comparing it to its historical volatility, Beijing Wantai Biological is 1.22 times less risky than Zhejiang Qianjiang. It trades about 0.07 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 947.00 in Zhejiang Qianjiang Motorcycle on August 29, 2024 and sell it today you would earn a total of 701.00 from holding Zhejiang Qianjiang Motorcycle or generate 74.02% 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. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Beijing Wantai Biological |
| Zhejiang Qianjiang |
Beijing Wantai and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Zhejiang Qianjiang
The main advantage of trading using opposite Beijing Wantai and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Beijing Wantai vs. Jointo Energy Investment | Beijing Wantai vs. Hunan Tyen Machinery | Beijing Wantai vs. Hongrun Construction Group | Beijing Wantai vs. Shenzhen Centralcon Investment |
| Zhejiang Qianjiang vs. Agricultural Bank of | Zhejiang Qianjiang vs. Industrial and Commercial | Zhejiang Qianjiang vs. Bank of China | Zhejiang Qianjiang vs. China Construction Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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