Correlation Between Beijing Wantai and Lotus Health
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By analyzing existing cross correlation between Beijing Wantai Biological and Lotus Health Group, you can compare the effects of market volatilities on Beijing Wantai and Lotus Health 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 Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Lotus Health.
Diversification Opportunities for Beijing Wantai and Lotus Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Lotus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group 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 Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Lotus Health go up and down completely randomly.
Pair Corralation between Beijing Wantai and Lotus Health
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to under-perform the Lotus Health. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Wantai Biological is 1.08 times less risky than Lotus Health. The stock trades about -0.01 of its potential returns per unit of risk. The Lotus Health Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Lotus Health Group on September 4, 2024 and sell it today you would earn a total of 232.00 from holding Lotus Health Group or generate 80.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. Lotus Health Group
Performance |
| Timeline |
| Beijing Wantai Biological |
| Lotus Health Group |
Beijing Wantai and Lotus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Lotus Health
The main advantage of trading using opposite Beijing Wantai and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health'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 |
| Lotus Health vs. Poly Real Estate | Lotus Health vs. China Vanke Co | Lotus Health vs. China Merchants Shekou | Lotus Health 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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