Correlation Between Beijing Enterprises and Artesian Resources
Can any of the company-specific risk be diversified away by investing in both Beijing Enterprises and Artesian Resources 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 Beijing Enterprises and Artesian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Enterprises Water and Artesian Resources, you can compare the effects of market volatilities on Beijing Enterprises and Artesian Resources 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 Enterprises with a short position of Artesian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Enterprises and Artesian Resources.
Diversification Opportunities for Beijing Enterprises and Artesian Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beijing and Artesian is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Enterprises Water and Artesian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artesian Resources and Beijing Enterprises 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 Enterprises Water are associated (or correlated) with Artesian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artesian Resources has no effect on the direction of Beijing Enterprises i.e., Beijing Enterprises and Artesian Resources go up and down completely randomly.
Pair Corralation between Beijing Enterprises and Artesian Resources
Assuming the 90 days horizon Beijing Enterprises Water is expected to under-perform the Artesian Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Beijing Enterprises Water is 1.68 times less risky than Artesian Resources. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Artesian Resources is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,424 in Artesian Resources on August 25, 2024 and sell it today you would lose (32.00) from holding Artesian Resources or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Enterprises Water vs. Artesian Resources
Performance |
| Timeline |
| Beijing Enterprises Water |
| Artesian Resources |
Beijing Enterprises and Artesian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Enterprises and Artesian Resources
The main advantage of trading using opposite Beijing Enterprises and Artesian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Enterprises position performs unexpectedly, Artesian Resources 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 Artesian Resources will offset losses from the drop in Artesian Resources' long position.| Beijing Enterprises vs. Artesian Resources | Beijing Enterprises vs. Global Water Resources | Beijing Enterprises vs. Essential Utilities | Beijing Enterprises vs. American Water Works |
| Artesian Resources vs. California Water Service | Artesian Resources vs. SJW Group Common | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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