Correlation Between Beijing Wantai and Xinjiang Tianrun
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By analyzing existing cross correlation between Beijing Wantai Biological and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Beijing Wantai and Xinjiang Tianrun 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 Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Xinjiang Tianrun.
Diversification Opportunities for Beijing Wantai and Xinjiang Tianrun
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Xinjiang is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy 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 Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Beijing Wantai and Xinjiang Tianrun
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 1.52 times more return on investment than Xinjiang Tianrun. However, Beijing Wantai is 1.52 times more volatile than Xinjiang Tianrun Dairy. It trades about 0.07 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.02 per unit of risk. If you would invest 4,830 in Beijing Wantai Biological on September 4, 2024 and sell it today you would earn a total of 2,700 from holding Beijing Wantai Biological or generate 55.9% 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. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Beijing Wantai Biological |
| Xinjiang Tianrun Dairy |
Beijing Wantai and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Xinjiang Tianrun
The main advantage of trading using opposite Beijing Wantai and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun'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 |
| Xinjiang Tianrun vs. Xilong Chemical Co | Xinjiang Tianrun vs. China Publishing Media | Xinjiang Tianrun vs. Miracll Chemicals Co | Xinjiang Tianrun vs. Xiangtan Electrochemical Scientific |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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