Correlation Between Beijing Baolande and Sinomach General
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By analyzing existing cross correlation between Beijing Baolande Software and Sinomach General Machinery, you can compare the effects of market volatilities on Beijing Baolande and Sinomach General 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 Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Baolande and Sinomach General.
Diversification Opportunities for Beijing Baolande and Sinomach General
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Sinomach is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Baolande Software and Sinomach General Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach General Mac 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 Sinomach General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach General Mac has no effect on the direction of Beijing Baolande i.e., Beijing Baolande and Sinomach General go up and down completely randomly.
Pair Corralation between Beijing Baolande and Sinomach General
Assuming the 90 days trading horizon Beijing Baolande Software is expected to under-perform the Sinomach General. In addition to that, Beijing Baolande is 1.45 times more volatile than Sinomach General Machinery. It trades about -0.12 of its total potential returns per unit of risk. Sinomach General Machinery is currently generating about -0.05 per unit of volatility. If you would invest 1,701 in Sinomach General Machinery on October 26, 2024 and sell it today you would lose (184.00) from holding Sinomach General Machinery or give up 10.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Baolande Software vs. Sinomach General Machinery
Performance |
| Timeline |
| Beijing Baolande Software |
| Sinomach General Mac |
Beijing Baolande and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Baolande and Sinomach General
The main advantage of trading using opposite Beijing Baolande and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Baolande position performs unexpectedly, Sinomach General 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 Sinomach General will offset losses from the drop in Sinomach General'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 |
| Sinomach General vs. Ming Yang Smart | Sinomach General vs. 159681 | Sinomach General vs. 159005 | Sinomach General vs. Loctek Ergonomic Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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