Correlation Between Bingo Software and WuXi Xinje
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By analyzing existing cross correlation between Bingo Software Co and WuXi Xinje Electric, you can compare the effects of market volatilities on Bingo Software and WuXi Xinje 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 Bingo Software with a short position of WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bingo Software and WuXi Xinje.
Diversification Opportunities for Bingo Software and WuXi Xinje
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bingo and WuXi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bingo Software Co and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric and Bingo Software 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 Bingo Software Co are associated (or correlated) with WuXi Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of Bingo Software i.e., Bingo Software and WuXi Xinje go up and down completely randomly.
Pair Corralation between Bingo Software and WuXi Xinje
Assuming the 90 days trading horizon Bingo Software Co is expected to generate 1.54 times more return on investment than WuXi Xinje. However, Bingo Software is 1.54 times more volatile than WuXi Xinje Electric. It trades about 0.11 of its potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.1 per unit of risk. If you would invest 1,210 in Bingo Software Co on November 7, 2024 and sell it today you would earn a total of 1,691 from holding Bingo Software Co or generate 139.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bingo Software Co vs. WuXi Xinje Electric
Performance |
| Timeline |
| Bingo Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| WuXi Xinje Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Bingo Software and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bingo Software and WuXi Xinje
The main advantage of trading using opposite Bingo Software and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bingo Software position performs unexpectedly, WuXi Xinje 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 WuXi Xinje will offset losses from the drop in WuXi Xinje's long position.The idea behind Bingo Software Co and WuXi Xinje Electric 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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