Correlation Between Beijing YanDong and Dongguan Tarry
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By analyzing existing cross correlation between Beijing YanDong MicroElectronic and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Beijing YanDong and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing YanDong and Dongguan Tarry.
Diversification Opportunities for Beijing YanDong and Dongguan Tarry
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijing and Dongguan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Beijing YanDong MicroElectroni and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Beijing YanDong i.e., Beijing YanDong and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Beijing YanDong and Dongguan Tarry
Assuming the 90 days trading horizon Beijing YanDong is expected to generate 1.69 times less return on investment than Dongguan Tarry. In addition to that, Beijing YanDong is 1.02 times more volatile than Dongguan Tarry Electronics. It trades about 0.04 of its total potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.08 per unit of volatility. If you would invest 4,526 in Dongguan Tarry Electronics on October 13, 2024 and sell it today you would earn a total of 1,819 from holding Dongguan Tarry Electronics or generate 40.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing YanDong MicroElectroni vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Beijing YanDong Micr |
| Dongguan Tarry Elect |
Beijing YanDong and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing YanDong and Dongguan Tarry
The main advantage of trading using opposite Beijing YanDong and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing YanDong position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Beijing YanDong vs. Tianjin Silvery Dragon | Beijing YanDong vs. Shenzhen Silver Basis | Beijing YanDong vs. Guangdong Silvere Sci | Beijing YanDong vs. Shenyang Blue Silver |
| Dongguan Tarry vs. TongFu Microelectronics Co | Dongguan Tarry vs. Beijing YanDong MicroElectronic | Dongguan Tarry vs. Sihui Fuji Electronics | Dongguan Tarry vs. Uroica Mining Safety |
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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