Correlation Between Beijing Roborock and XiAn Dagang
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By analyzing existing cross correlation between Beijing Roborock Technology and XiAn Dagang Road, you can compare the effects of market volatilities on Beijing Roborock and XiAn Dagang 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 Roborock with a short position of XiAn Dagang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Roborock and XiAn Dagang.
Diversification Opportunities for Beijing Roborock and XiAn Dagang
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijing and XiAn is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Roborock Technology and XiAn Dagang Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XiAn Dagang Road and Beijing Roborock 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 Roborock Technology are associated (or correlated) with XiAn Dagang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XiAn Dagang Road has no effect on the direction of Beijing Roborock i.e., Beijing Roborock and XiAn Dagang go up and down completely randomly.
Pair Corralation between Beijing Roborock and XiAn Dagang
Assuming the 90 days trading horizon Beijing Roborock is expected to generate 1.18 times less return on investment than XiAn Dagang. But when comparing it to its historical volatility, Beijing Roborock Technology is 1.18 times less risky than XiAn Dagang. It trades about 0.01 of its potential returns per unit of risk. XiAn Dagang Road is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 686.00 in XiAn Dagang Road on November 9, 2024 and sell it today you would lose (66.00) from holding XiAn Dagang Road or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Beijing Roborock Technology vs. XiAn Dagang Road
Performance |
| Timeline |
| Beijing Roborock Tec |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| XiAn Dagang Road |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Beijing Roborock and XiAn Dagang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Roborock and XiAn Dagang
The main advantage of trading using opposite Beijing Roborock and XiAn Dagang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Roborock position performs unexpectedly, XiAn Dagang 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 XiAn Dagang will offset losses from the drop in XiAn Dagang's long position.The idea behind Beijing Roborock Technology and XiAn Dagang Road pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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