Correlation Between BEIJJINGNENG CLERGHYC1 and HOKURIKU
Can any of the company-specific risk be diversified away by investing in both BEIJJINGNENG CLERGHYC1 and HOKURIKU at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BEIJJINGNENG CLERGHYC1 and HOKURIKU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEIJJINGNENG CLERGHYC1 and HOKURIKU EL PWR, you can compare the effects of market volatilities on BEIJJINGNENG CLERGHYC1 and HOKURIKU 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 BEIJJINGNENG CLERGHYC1 with a short position of HOKURIKU. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEIJJINGNENG CLERGHYC1 and HOKURIKU.
Diversification Opportunities for BEIJJINGNENG CLERGHYC1 and HOKURIKU
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BEIJJINGNENG and HOKURIKU is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BEIJJINGNENG CLERGHYC1 and HOKURIKU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOKURIKU EL PWR and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 are associated (or correlated) with HOKURIKU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOKURIKU EL PWR has no effect on the direction of BEIJJINGNENG CLERGHYC1 i.e., BEIJJINGNENG CLERGHYC1 and HOKURIKU go up and down completely randomly.
Pair Corralation between BEIJJINGNENG CLERGHYC1 and HOKURIKU
Assuming the 90 days horizon BEIJJINGNENG CLERGHYC1 is expected to generate 1.65 times more return on investment than HOKURIKU. However, BEIJJINGNENG CLERGHYC1 is 1.65 times more volatile than HOKURIKU EL PWR. It trades about 0.07 of its potential returns per unit of risk. HOKURIKU EL PWR is currently generating about -0.21 per unit of risk. If you would invest 21.00 in BEIJJINGNENG CLERGHYC1 on September 13, 2024 and sell it today you would earn a total of 1.00 from holding BEIJJINGNENG CLERGHYC1 or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEIJJINGNENG CLERGHYC1 vs. HOKURIKU EL PWR
Performance |
| Timeline |
| BEIJJINGNENG CLERGHYC1 |
| HOKURIKU EL PWR |
BEIJJINGNENG CLERGHYC1 and HOKURIKU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEIJJINGNENG CLERGHYC1 and HOKURIKU
The main advantage of trading using opposite BEIJJINGNENG CLERGHYC1 and HOKURIKU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEIJJINGNENG CLERGHYC1 position performs unexpectedly, HOKURIKU 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 HOKURIKU will offset losses from the drop in HOKURIKU's long position.| BEIJJINGNENG CLERGHYC1 vs. Perseus Mining Limited | BEIJJINGNENG CLERGHYC1 vs. NAKED WINES PLC | BEIJJINGNENG CLERGHYC1 vs. Insteel Industries | BEIJJINGNENG CLERGHYC1 vs. United States Steel |
| HOKURIKU vs. Air Lease | HOKURIKU vs. Ryanair Holdings plc | HOKURIKU vs. ALBIS LEASING AG | HOKURIKU vs. National Storage Affiliates |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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