Correlation Between Zhongyin Babi and Beijing Sanyuan
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By analyzing existing cross correlation between Zhongyin Babi Food and Beijing Sanyuan Foods, you can compare the effects of market volatilities on Zhongyin Babi and Beijing Sanyuan 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 Zhongyin Babi with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongyin Babi and Beijing Sanyuan.
Diversification Opportunities for Zhongyin Babi and Beijing Sanyuan
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhongyin and Beijing is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Zhongyin Babi Food and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and Zhongyin Babi 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 Zhongyin Babi Food are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of Zhongyin Babi i.e., Zhongyin Babi and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between Zhongyin Babi and Beijing Sanyuan
Assuming the 90 days trading horizon Zhongyin Babi Food is expected to generate 1.36 times more return on investment than Beijing Sanyuan. However, Zhongyin Babi is 1.36 times more volatile than Beijing Sanyuan Foods. It trades about 0.06 of its potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about -0.01 per unit of risk. If you would invest 1,557 in Zhongyin Babi Food on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Zhongyin Babi Food or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongyin Babi Food vs. Beijing Sanyuan Foods
Performance |
| Timeline |
| Zhongyin Babi Food |
| Beijing Sanyuan Foods |
Zhongyin Babi and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongyin Babi and Beijing Sanyuan
The main advantage of trading using opposite Zhongyin Babi and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongyin Babi position performs unexpectedly, Beijing Sanyuan 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 Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.| Zhongyin Babi vs. China Petroleum Chemical | Zhongyin Babi vs. PetroChina Co Ltd | Zhongyin Babi vs. China State Construction | Zhongyin Babi vs. China Railway Group |
| Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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