Correlation Between Beijing YanDong and Anhui Tongguan
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By analyzing existing cross correlation between Beijing YanDong MicroElectronic and Anhui Tongguan Copper, you can compare the effects of market volatilities on Beijing YanDong and Anhui Tongguan 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 Anhui Tongguan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing YanDong and Anhui Tongguan.
Diversification Opportunities for Beijing YanDong and Anhui Tongguan
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Anhui is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Beijing YanDong MicroElectroni and Anhui Tongguan Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Tongguan Copper 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 Anhui Tongguan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Tongguan Copper has no effect on the direction of Beijing YanDong i.e., Beijing YanDong and Anhui Tongguan go up and down completely randomly.
Pair Corralation between Beijing YanDong and Anhui Tongguan
Assuming the 90 days trading horizon Beijing YanDong MicroElectronic is expected to under-perform the Anhui Tongguan. But the stock apears to be less risky and, when comparing its historical volatility, Beijing YanDong MicroElectronic is 1.1 times less risky than Anhui Tongguan. The stock trades about -0.16 of its potential returns per unit of risk. The Anhui Tongguan Copper is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Anhui Tongguan Copper on October 11, 2024 and sell it today you would lose (45.00) from holding Anhui Tongguan Copper or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing YanDong MicroElectroni vs. Anhui Tongguan Copper
Performance |
| Timeline |
| Beijing YanDong Micr |
| Anhui Tongguan Copper |
Beijing YanDong and Anhui Tongguan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing YanDong and Anhui Tongguan
The main advantage of trading using opposite Beijing YanDong and Anhui Tongguan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing YanDong position performs unexpectedly, Anhui Tongguan 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 Anhui Tongguan will offset losses from the drop in Anhui Tongguan's long position.| Beijing YanDong vs. Ping An Insurance | Beijing YanDong vs. China Life Insurance | Beijing YanDong vs. Hubei Geoway Investment | Beijing YanDong vs. Penyao Environmental Protection |
| Anhui Tongguan vs. Ningbo Ligong Online | Anhui Tongguan vs. Integrated Electronic Systems | Anhui Tongguan vs. Beijing YanDong MicroElectronic | Anhui Tongguan vs. Guangzhou Jinyi Media |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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