Correlation Between Beijing YanDong and AVCON Information
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By analyzing existing cross correlation between Beijing YanDong MicroElectronic and AVCON Information Tech, you can compare the effects of market volatilities on Beijing YanDong and AVCON Information 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 YanDong with a short position of AVCON Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing YanDong and AVCON Information.
Diversification Opportunities for Beijing YanDong and AVCON Information
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and AVCON is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Beijing YanDong MicroElectroni and AVCON Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVCON Information Tech and Beijing YanDong 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 YanDong MicroElectronic are associated (or correlated) with AVCON Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVCON Information Tech has no effect on the direction of Beijing YanDong i.e., Beijing YanDong and AVCON Information go up and down completely randomly.
Pair Corralation between Beijing YanDong and AVCON Information
Assuming the 90 days trading horizon Beijing YanDong is expected to generate 3.2 times less return on investment than AVCON Information. But when comparing it to its historical volatility, Beijing YanDong MicroElectronic is 1.16 times less risky than AVCON Information. It trades about 0.1 of its potential returns per unit of risk. AVCON Information Tech is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 355.00 in AVCON Information Tech on November 7, 2024 and sell it today you would earn a total of 53.00 from holding AVCON Information Tech or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing YanDong MicroElectroni vs. AVCON Information Tech
Performance |
| Timeline |
| Beijing YanDong Micr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AVCON Information Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Beijing YanDong and AVCON Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing YanDong and AVCON Information
The main advantage of trading using opposite Beijing YanDong and AVCON Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing YanDong position performs unexpectedly, AVCON Information 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 AVCON Information will offset losses from the drop in AVCON Information's long position.The idea behind Beijing YanDong MicroElectronic and AVCON Information Tech 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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