Correlation Between Heilongjiang Publishing and Beijing Lier
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By analyzing existing cross correlation between Heilongjiang Publishing Media and Beijing Lier High, you can compare the effects of market volatilities on Heilongjiang Publishing and Beijing Lier 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 Heilongjiang Publishing with a short position of Beijing Lier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and Beijing Lier.
Diversification Opportunities for Heilongjiang Publishing and Beijing Lier
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Heilongjiang and Beijing is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Beijing Lier High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lier High and Heilongjiang Publishing 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 Heilongjiang Publishing Media are associated (or correlated) with Beijing Lier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lier High has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Beijing Lier go up and down completely randomly.
Pair Corralation between Heilongjiang Publishing and Beijing Lier
Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to under-perform the Beijing Lier. But the stock apears to be less risky and, when comparing its historical volatility, Heilongjiang Publishing Media is 1.03 times less risky than Beijing Lier. The stock trades about -0.17 of its potential returns per unit of risk. The Beijing Lier High is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Beijing Lier High on October 22, 2024 and sell it today you would lose (21.00) from holding Beijing Lier High or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Publishing Media vs. Beijing Lier High
Performance |
| Timeline |
| Heilongjiang Publishing |
| Beijing Lier High |
Heilongjiang Publishing and Beijing Lier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Publishing and Beijing Lier
The main advantage of trading using opposite Heilongjiang Publishing and Beijing Lier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing position performs unexpectedly, Beijing Lier 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 Lier will offset losses from the drop in Beijing Lier's long position.The idea behind Heilongjiang Publishing Media and Beijing Lier High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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