Correlation Between Beijing Wantai and Threes Company
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By analyzing existing cross correlation between Beijing Wantai Biological and Threes Company Media, you can compare the effects of market volatilities on Beijing Wantai and Threes Company 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 Threes Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Threes Company.
Diversification Opportunities for Beijing Wantai and Threes Company
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Threes is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Threes Company Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Threes Company 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 Threes Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Threes Company has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Threes Company go up and down completely randomly.
Pair Corralation between Beijing Wantai and Threes Company
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to under-perform the Threes Company. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Wantai Biological is 2.68 times less risky than Threes Company. The stock trades about -0.07 of its potential returns per unit of risk. The Threes Company Media is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,150 in Threes Company Media on August 28, 2024 and sell it today you would earn a total of 183.00 from holding Threes Company Media or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. Threes Company Media
Performance |
| Timeline |
| Beijing Wantai Biological |
| Threes Company |
Beijing Wantai and Threes Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Threes Company
The main advantage of trading using opposite Beijing Wantai and Threes Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Threes Company 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 Threes Company will offset losses from the drop in Threes Company's long position.| Beijing Wantai vs. Jiangyin Jianghua Microelectronics | Beijing Wantai vs. Guangzhou Haige Communications | Beijing Wantai vs. Fuzhou Rockchip Electronics | Beijing Wantai vs. Sinomach Automobile Co |
| Threes Company vs. Industrial and Commercial | Threes Company vs. Agricultural Bank of | Threes Company vs. China Construction Bank | Threes Company vs. Bank of China |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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