Correlation Between Beijing Wantai and Guilin Seamild
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By analyzing existing cross correlation between Beijing Wantai Biological and Guilin Seamild Foods, you can compare the effects of market volatilities on Beijing Wantai and Guilin Seamild 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 Guilin Seamild. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Guilin Seamild.
Diversification Opportunities for Beijing Wantai and Guilin Seamild
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guilin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild Foods 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 Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Guilin Seamild go up and down completely randomly.
Pair Corralation between Beijing Wantai and Guilin Seamild
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 1.25 times more return on investment than Guilin Seamild. However, Beijing Wantai is 1.25 times more volatile than Guilin Seamild Foods. It trades about 0.02 of its potential returns per unit of risk. Guilin Seamild Foods is currently generating about 0.0 per unit of risk. If you would invest 6,927 in Beijing Wantai Biological on September 4, 2024 and sell it today you would earn a total of 323.00 from holding Beijing Wantai Biological or generate 4.66% 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. Guilin Seamild Foods
Performance |
| Timeline |
| Beijing Wantai Biological |
| Guilin Seamild Foods |
Beijing Wantai and Guilin Seamild Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Guilin Seamild
The main advantage of trading using opposite Beijing Wantai and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild's long position.| Beijing Wantai vs. Hubeiyichang Transportation Group | Beijing Wantai vs. Jiangsu Jinling Sports | Beijing Wantai vs. Sino Platinum Metals Co | Beijing Wantai vs. Qinghaihuading Industrial Co |
| Guilin Seamild vs. Poly Real Estate | Guilin Seamild vs. China Vanke Co | Guilin Seamild vs. China Merchants Shekou | Guilin Seamild vs. Huafa Industrial Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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