Correlation Between Beijing Wantai and Guangdong Jinming
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By analyzing existing cross correlation between Beijing Wantai Biological and Guangdong Jinming Machinery, you can compare the effects of market volatilities on Beijing Wantai and Guangdong Jinming 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 Guangdong Jinming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Guangdong Jinming.
Diversification Opportunities for Beijing Wantai and Guangdong Jinming
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guangdong is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Guangdong Jinming Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jinming 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 Guangdong Jinming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jinming has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Guangdong Jinming go up and down completely randomly.
Pair Corralation between Beijing Wantai and Guangdong Jinming
Assuming the 90 days trading horizon Beijing Wantai is expected to generate 1.34 times less return on investment than Guangdong Jinming. But when comparing it to its historical volatility, Beijing Wantai Biological is 1.38 times less risky than Guangdong Jinming. It trades about 0.04 of its potential returns per unit of risk. Guangdong Jinming Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 530.00 in Guangdong Jinming Machinery on September 12, 2024 and sell it today you would earn a total of 155.00 from holding Guangdong Jinming Machinery or generate 29.25% 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. Guangdong Jinming Machinery
Performance |
| Timeline |
| Beijing Wantai Biological |
| Guangdong Jinming |
Beijing Wantai and Guangdong Jinming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Guangdong Jinming
The main advantage of trading using opposite Beijing Wantai and Guangdong Jinming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Guangdong Jinming 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 Guangdong Jinming will offset losses from the drop in Guangdong Jinming's long position.| Beijing Wantai vs. Ningbo Ligong Online | Beijing Wantai vs. Shenzhen Silver Basis | Beijing Wantai vs. Easyhome New Retail | Beijing Wantai vs. Luolai Home Textile |
| Guangdong Jinming vs. Agricultural Bank of | Guangdong Jinming vs. Industrial and Commercial | Guangdong Jinming vs. Bank of China | Guangdong Jinming vs. PetroChina Co Ltd |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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