Correlation Between Touchstone International and Beijing Wandong
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By analyzing existing cross correlation between Touchstone International Medical and Beijing Wandong Medical, you can compare the effects of market volatilities on Touchstone International and Beijing Wandong 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 Touchstone International with a short position of Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Beijing Wandong.
Diversification Opportunities for Touchstone International and Beijing Wandong
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Touchstone and Beijing is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Medic and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical and Touchstone International 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 Touchstone International Medical are associated (or correlated) with Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Touchstone International i.e., Touchstone International and Beijing Wandong go up and down completely randomly.
Pair Corralation between Touchstone International and Beijing Wandong
Assuming the 90 days trading horizon Touchstone International is expected to generate 8.0 times less return on investment than Beijing Wandong. But when comparing it to its historical volatility, Touchstone International Medical is 1.25 times less risky than Beijing Wandong. It trades about 0.04 of its potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Beijing Wandong Medical on August 25, 2024 and sell it today you would earn a total of 280.00 from holding Beijing Wandong Medical or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Medic vs. Beijing Wandong Medical
Performance |
| Timeline |
| Touchstone International |
| Beijing Wandong Medical |
Touchstone International and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Beijing Wandong
The main advantage of trading using opposite Touchstone International and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, Beijing Wandong 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 Wandong will offset losses from the drop in Beijing Wandong's long position.| Touchstone International vs. Bank of China | Touchstone International vs. Kweichow Moutai Co | Touchstone International vs. PetroChina Co Ltd | Touchstone International vs. Bank of Communications |
| Beijing Wandong vs. Bank of China | Beijing Wandong vs. Kweichow Moutai Co | Beijing Wandong vs. PetroChina Co Ltd | Beijing Wandong vs. Bank of Communications |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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