Correlation Between Beijing Baolande and Luzhou Lao
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By analyzing existing cross correlation between Beijing Baolande Software and Luzhou Lao Jiao, you can compare the effects of market volatilities on Beijing Baolande and Luzhou Lao 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 Baolande with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Baolande and Luzhou Lao.
Diversification Opportunities for Beijing Baolande and Luzhou Lao
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Luzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Baolande Software and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Beijing Baolande 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 Baolande Software are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Beijing Baolande i.e., Beijing Baolande and Luzhou Lao go up and down completely randomly.
Pair Corralation between Beijing Baolande and Luzhou Lao
Assuming the 90 days trading horizon Beijing Baolande Software is expected to generate 2.86 times more return on investment than Luzhou Lao. However, Beijing Baolande is 2.86 times more volatile than Luzhou Lao Jiao. It trades about 0.19 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about 0.06 per unit of risk. If you would invest 2,414 in Beijing Baolande Software on November 6, 2024 and sell it today you would earn a total of 298.00 from holding Beijing Baolande Software or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Baolande Software vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Beijing Baolande Software |
| Luzhou Lao Jiao |
Beijing Baolande and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Baolande and Luzhou Lao
The main advantage of trading using opposite Beijing Baolande and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Baolande position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Beijing Baolande vs. Aluminum Corp of | Beijing Baolande vs. Heilongjiang Transport Development | Beijing Baolande vs. China Aluminum International | Beijing Baolande vs. Everjoy Health Group |
| Luzhou Lao vs. Rising Nonferrous Metals | Luzhou Lao vs. Tianjin Hi Tech Development | Luzhou Lao vs. Strait Innovation Internet | Luzhou Lao vs. Dr Peng Telecom |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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