Correlation Between Beijing Wantai and Shanghai Shuixing
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By analyzing existing cross correlation between Beijing Wantai Biological and Shanghai Shuixing Home, you can compare the effects of market volatilities on Beijing Wantai and Shanghai Shuixing 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 Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Shanghai Shuixing.
Diversification Opportunities for Beijing Wantai and Shanghai Shuixing
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Shanghai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home 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 Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Beijing Wantai and Shanghai Shuixing
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 0.79 times more return on investment than Shanghai Shuixing. However, Beijing Wantai Biological is 1.27 times less risky than Shanghai Shuixing. It trades about 0.03 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about -0.02 per unit of risk. If you would invest 6,922 in Beijing Wantai Biological on September 3, 2024 and sell it today you would earn a total of 372.00 from holding Beijing Wantai Biological or generate 5.37% 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. Shanghai Shuixing Home
Performance |
| Timeline |
| Beijing Wantai Biological |
| Shanghai Shuixing Home |
Beijing Wantai and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Shanghai Shuixing
The main advantage of trading using opposite Beijing Wantai and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Shanghai Shuixing 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 Shanghai Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Beijing Wantai vs. Cofoe Medical Technology | Beijing Wantai vs. Guangzhou Boji Medical | Beijing Wantai vs. Qingdao Baheal Medical | Beijing Wantai vs. Double Medical Technology |
| Shanghai Shuixing vs. Cofoe Medical Technology | Shanghai Shuixing vs. Qingdao Baheal Medical | Shanghai Shuixing vs. Jinling Hotel Corp | Shanghai Shuixing vs. Allmed Medical Products |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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