Correlation Between Beijing YanDong and Shanghai Material
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By analyzing existing cross correlation between Beijing YanDong MicroElectronic and Shanghai Material Trading, you can compare the effects of market volatilities on Beijing YanDong and Shanghai Material 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 Shanghai Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing YanDong and Shanghai Material.
Diversification Opportunities for Beijing YanDong and Shanghai Material
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shanghai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beijing YanDong MicroElectroni and Shanghai Material Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Material Trading 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 Shanghai Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Material Trading has no effect on the direction of Beijing YanDong i.e., Beijing YanDong and Shanghai Material go up and down completely randomly.
Pair Corralation between Beijing YanDong and Shanghai Material
Assuming the 90 days trading horizon Beijing YanDong MicroElectronic is expected to generate 1.34 times more return on investment than Shanghai Material. However, Beijing YanDong is 1.34 times more volatile than Shanghai Material Trading. It trades about 0.07 of its potential returns per unit of risk. Shanghai Material Trading is currently generating about 0.05 per unit of risk. If you would invest 1,482 in Beijing YanDong MicroElectronic on November 4, 2024 and sell it today you would earn a total of 421.00 from holding Beijing YanDong MicroElectronic or generate 28.41% 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. Shanghai Material Trading
Performance |
| Timeline |
| Beijing YanDong Micr |
| Shanghai Material Trading |
Beijing YanDong and Shanghai Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing YanDong and Shanghai Material
The main advantage of trading using opposite Beijing YanDong and Shanghai Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing YanDong position performs unexpectedly, Shanghai Material 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 Shanghai Material will offset losses from the drop in Shanghai Material's long position.| Beijing YanDong vs. Aier Eye Hospital | Beijing YanDong vs. Nanjing Putian Telecommunications | Beijing YanDong vs. Dongfeng Automobile Co | Beijing YanDong vs. Tongyu Communication |
| Shanghai Material vs. Youyou Foods Co | Shanghai Material vs. XinJiang GuoTong Pipeline | Shanghai Material vs. Beijing Kaiwen Education | Shanghai Material vs. Shanghai Ziyan Foods |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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