Correlation Between Heilongjiang Publishing and Beijing Kaiwen
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By analyzing existing cross correlation between Heilongjiang Publishing Media and Beijing Kaiwen Education, you can compare the effects of market volatilities on Heilongjiang Publishing and Beijing Kaiwen 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 Kaiwen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and Beijing Kaiwen.
Diversification Opportunities for Heilongjiang Publishing and Beijing Kaiwen
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Beijing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Beijing Kaiwen Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kaiwen Education 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 Kaiwen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kaiwen Education has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Beijing Kaiwen go up and down completely randomly.
Pair Corralation between Heilongjiang Publishing and Beijing Kaiwen
Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to generate 0.95 times more return on investment than Beijing Kaiwen. However, Heilongjiang Publishing Media is 1.05 times less risky than Beijing Kaiwen. It trades about 0.17 of its potential returns per unit of risk. Beijing Kaiwen Education is currently generating about -0.05 per unit of risk. If you would invest 1,458 in Heilongjiang Publishing Media on August 26, 2024 and sell it today you would earn a total of 219.00 from holding Heilongjiang Publishing Media or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Publishing Media vs. Beijing Kaiwen Education
Performance |
| Timeline |
| Heilongjiang Publishing |
| Beijing Kaiwen Education |
Heilongjiang Publishing and Beijing Kaiwen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Publishing and Beijing Kaiwen
The main advantage of trading using opposite Heilongjiang Publishing and Beijing Kaiwen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing position performs unexpectedly, Beijing Kaiwen 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 Kaiwen will offset losses from the drop in Beijing Kaiwen's long position.The idea behind Heilongjiang Publishing Media and Beijing Kaiwen Education 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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