Correlation Between Guotai Epoint and Beijing Mainstreets
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By analyzing existing cross correlation between Guotai Epoint Software and Beijing Mainstreets Investment, you can compare the effects of market volatilities on Guotai Epoint and Beijing Mainstreets 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 Guotai Epoint with a short position of Beijing Mainstreets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guotai Epoint and Beijing Mainstreets.
Diversification Opportunities for Guotai Epoint and Beijing Mainstreets
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guotai and Beijing is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Guotai Epoint Software and Beijing Mainstreets Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Mainstreets and Guotai Epoint 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 Guotai Epoint Software are associated (or correlated) with Beijing Mainstreets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Mainstreets has no effect on the direction of Guotai Epoint i.e., Guotai Epoint and Beijing Mainstreets go up and down completely randomly.
Pair Corralation between Guotai Epoint and Beijing Mainstreets
Assuming the 90 days trading horizon Guotai Epoint Software is expected to generate 1.0 times more return on investment than Beijing Mainstreets. However, Guotai Epoint is 1.0 times more volatile than Beijing Mainstreets Investment. It trades about 0.06 of its potential returns per unit of risk. Beijing Mainstreets Investment is currently generating about -0.07 per unit of risk. If you would invest 2,151 in Guotai Epoint Software on November 7, 2024 and sell it today you would earn a total of 801.00 from holding Guotai Epoint Software or generate 37.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guotai Epoint Software vs. Beijing Mainstreets Investment
Performance |
| Timeline |
| Guotai Epoint Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beijing Mainstreets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guotai Epoint and Beijing Mainstreets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guotai Epoint and Beijing Mainstreets
The main advantage of trading using opposite Guotai Epoint and Beijing Mainstreets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guotai Epoint position performs unexpectedly, Beijing Mainstreets 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 Beijing Mainstreets will offset losses from the drop in Beijing Mainstreets' long position.The idea behind Guotai Epoint Software and Beijing Mainstreets Investment 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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