Correlation Between Beijing Kingsoft and Guangdong Tianhe
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By analyzing existing cross correlation between Beijing Kingsoft Office and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Beijing Kingsoft and Guangdong Tianhe 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 Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kingsoft and Guangdong Tianhe.
Diversification Opportunities for Beijing Kingsoft and Guangdong Tianhe
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guangdong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kingsoft Office and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr 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 Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Beijing Kingsoft i.e., Beijing Kingsoft and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Beijing Kingsoft and Guangdong Tianhe
Assuming the 90 days trading horizon Beijing Kingsoft Office is expected to generate 1.49 times more return on investment than Guangdong Tianhe. However, Beijing Kingsoft is 1.49 times more volatile than Guangdong Tianhe Agricultural. It trades about 0.42 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.21 per unit of risk. If you would invest 25,765 in Beijing Kingsoft Office on November 6, 2024 and sell it today you would earn a total of 5,635 from holding Beijing Kingsoft Office or generate 21.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Kingsoft Office vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Beijing Kingsoft Office |
| Guangdong Tianhe Agr |
Beijing Kingsoft and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kingsoft and Guangdong Tianhe
The main advantage of trading using opposite Beijing Kingsoft and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kingsoft position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Beijing Kingsoft vs. Shandong Publishing Media | Beijing Kingsoft vs. Time Publishing and | Beijing Kingsoft vs. China Eastern Airlines | Beijing Kingsoft vs. Juneyao Airlines |
| Guangdong Tianhe vs. Ningbo Jintian Copper | Guangdong Tianhe vs. Uroica Mining Safety | Guangdong Tianhe vs. Mango Excellent Media | Guangdong Tianhe vs. Chengtun Mining Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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