Correlation Between Beijing Wantai and Liaoning Chengda
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By analyzing existing cross correlation between Beijing Wantai Biological and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Beijing Wantai and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Liaoning Chengda.
Diversification Opportunities for Beijing Wantai and Liaoning Chengda
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Liaoning is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Beijing Wantai and Liaoning Chengda
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 0.95 times more return on investment than Liaoning Chengda. However, Beijing Wantai Biological is 1.06 times less risky than Liaoning Chengda. It trades about 0.04 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about 0.03 per unit of risk. If you would invest 6,710 in Beijing Wantai Biological on September 3, 2024 and sell it today you would earn a total of 584.00 from holding Beijing Wantai Biological or generate 8.7% 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. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Beijing Wantai Biological |
| Liaoning Chengda Bio |
Beijing Wantai and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Liaoning Chengda
The main advantage of trading using opposite Beijing Wantai and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda'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 |
| Liaoning Chengda vs. Chengdu Kanghua Biological | Liaoning Chengda vs. Beijing Wantai Biological | Liaoning Chengda vs. Suzhou Novoprotein Scientific | Liaoning Chengda vs. Aluminum Corp of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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