Correlation Between Beijing Baolande and Longxing Chemical
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By analyzing existing cross correlation between Beijing Baolande Software and Longxing Chemical Stock, you can compare the effects of market volatilities on Beijing Baolande and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Baolande and Longxing Chemical.
Diversification Opportunities for Beijing Baolande and Longxing Chemical
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Longxing is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Baolande Software and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Beijing Baolande i.e., Beijing Baolande and Longxing Chemical go up and down completely randomly.
Pair Corralation between Beijing Baolande and Longxing Chemical
Assuming the 90 days trading horizon Beijing Baolande Software is expected to under-perform the Longxing Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Baolande Software is 1.15 times less risky than Longxing Chemical. The stock trades about -0.14 of its potential returns per unit of risk. The Longxing Chemical Stock is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 534.00 in Longxing Chemical Stock on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Longxing Chemical Stock or generate 1.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Baolande Software vs. Longxing Chemical Stock
Performance |
Timeline |
Beijing Baolande Software |
Longxing Chemical Stock |
Beijing Baolande and Longxing Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Baolande and Longxing Chemical
The main advantage of trading using opposite Beijing Baolande and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Baolande position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.Beijing Baolande vs. Bank of China | Beijing Baolande vs. Kweichow Moutai Co | Beijing Baolande vs. PetroChina Co Ltd | Beijing Baolande vs. Bank of Communications |
Longxing Chemical vs. Beijing Baolande Software | Longxing Chemical vs. GuoChuang Software Co | Longxing Chemical vs. Northern United Publishing | Longxing Chemical vs. Guotai Epoint Software |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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