Correlation Between Beijing Wantai and Long Yuan
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By analyzing existing cross correlation between Beijing Wantai Biological and Long Yuan Construction, you can compare the effects of market volatilities on Beijing Wantai and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Long Yuan.
Diversification Opportunities for Beijing Wantai and Long Yuan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Long is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Long Yuan go up and down completely randomly.
Pair Corralation between Beijing Wantai and Long Yuan
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 0.61 times more return on investment than Long Yuan. However, Beijing Wantai Biological is 1.64 times less risky than Long Yuan. It trades about 0.04 of its potential returns per unit of risk. Long Yuan Construction is currently generating about 0.01 per unit of risk. If you would invest 6,730 in Beijing Wantai Biological on November 3, 2024 and sell it today you would earn a total of 79.00 from holding Beijing Wantai Biological or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. Long Yuan Construction
Performance |
| Timeline |
| Beijing Wantai Biological |
| Long Yuan Construction |
Beijing Wantai and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Long Yuan
The main advantage of trading using opposite Beijing Wantai and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Beijing Wantai vs. ROPEOK Technology Group | Beijing Wantai vs. Maxvision Technology Corp | Beijing Wantai vs. Montage Technology Co | Beijing Wantai vs. Beijing Jiaman Dress |
| Long Yuan vs. Hefei Metalforming Mach | Long Yuan vs. Pengxin International Mining | Long Yuan vs. Guangdong Jingyi Metal | Long Yuan vs. Dymatic Chemicals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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