Correlation Between Beijing Wantai and Shanghai
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By analyzing existing cross correlation between Beijing Wantai Biological and Shanghai MG Stationery, you can compare the effects of market volatilities on Beijing Wantai and Shanghai 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Shanghai.
Diversification Opportunities for Beijing Wantai and Shanghai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Shanghai MG Stationery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai MG Stationery 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai MG Stationery has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Shanghai go up and down completely randomly.
Pair Corralation between Beijing Wantai and Shanghai
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to under-perform the Shanghai. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Wantai Biological is 1.68 times less risky than Shanghai. The stock trades about -0.03 of its potential returns per unit of risk. The Shanghai MG Stationery is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,025 in Shanghai MG Stationery on August 30, 2024 and sell it today you would earn a total of 415.00 from holding Shanghai MG Stationery or generate 13.72% 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. Shanghai MG Stationery
Performance |
| Timeline |
| Beijing Wantai Biological |
| Shanghai MG Stationery |
Beijing Wantai and Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Shanghai
The main advantage of trading using opposite Beijing Wantai and Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Shanghai 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 will offset losses from the drop in Shanghai's long position.| Beijing Wantai vs. Industrial and Commercial | Beijing Wantai vs. Agricultural Bank of | Beijing Wantai vs. China Construction Bank | Beijing Wantai vs. Bank of China |
| Shanghai vs. Focus Media Information | Shanghai vs. Hengdian Entertainment Co | Shanghai vs. Chengdu B ray Media | Shanghai vs. Shanghai Yaoji Playing |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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