Correlation Between Beijing Kingsoft and Zhejiang Yinlun
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By analyzing existing cross correlation between Beijing Kingsoft Office and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Beijing Kingsoft and Zhejiang Yinlun 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 Kingsoft with a short position of Zhejiang Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kingsoft and Zhejiang Yinlun.
Diversification Opportunities for Beijing Kingsoft and Zhejiang Yinlun
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Zhejiang is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kingsoft Office and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery and Beijing Kingsoft 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 Kingsoft Office are associated (or correlated) with Zhejiang Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Beijing Kingsoft i.e., Beijing Kingsoft and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Beijing Kingsoft and Zhejiang Yinlun
Assuming the 90 days trading horizon Beijing Kingsoft Office is expected to generate 1.2 times more return on investment than Zhejiang Yinlun. However, Beijing Kingsoft is 1.2 times more volatile than Zhejiang Yinlun Machinery. It trades about 0.15 of its potential returns per unit of risk. Zhejiang Yinlun Machinery is currently generating about 0.15 per unit of risk. If you would invest 28,639 in Beijing Kingsoft Office on November 1, 2024 and sell it today you would earn a total of 2,761 from holding Beijing Kingsoft Office or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Kingsoft Office vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Beijing Kingsoft Office |
| Zhejiang Yinlun Machinery |
Beijing Kingsoft and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kingsoft and Zhejiang Yinlun
The main advantage of trading using opposite Beijing Kingsoft and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kingsoft position performs unexpectedly, Zhejiang Yinlun 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 Zhejiang Yinlun will offset losses from the drop in Zhejiang Yinlun's long position.| Beijing Kingsoft vs. Bank of China | Beijing Kingsoft vs. Kweichow Moutai Co | Beijing Kingsoft vs. PetroChina Co Ltd | Beijing Kingsoft vs. Bank of Communications |
| Zhejiang Yinlun vs. APT Medical | Zhejiang Yinlun vs. Kontour Medical Technology | Zhejiang Yinlun vs. Sino Medical Sciences | Zhejiang Yinlun vs. Heilongjiang Transport Development |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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