Correlation Between Beijing MediaLimited and Avance Gas
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited and Avance Gas 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 MediaLimited and Avance Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Avance Gas Holding, you can compare the effects of market volatilities on Beijing MediaLimited and Avance Gas 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 MediaLimited with a short position of Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and Avance Gas.
Diversification Opportunities for Beijing MediaLimited and Avance Gas
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beijing and Avance is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding and Beijing MediaLimited 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 Media are associated (or correlated) with Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Beijing MediaLimited i.e., Beijing MediaLimited and Avance Gas go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and Avance Gas
Assuming the 90 days horizon Beijing MediaLimited is expected to generate 1.01 times less return on investment than Avance Gas. In addition to that, Beijing MediaLimited is 1.77 times more volatile than Avance Gas Holding. It trades about 0.01 of its total potential returns per unit of risk. Avance Gas Holding is currently generating about 0.03 per unit of volatility. If you would invest 900.00 in Avance Gas Holding on September 2, 2024 and sell it today you would earn a total of 81.00 from holding Avance Gas Holding or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. Avance Gas Holding
Performance |
| Timeline |
| Beijing MediaLimited |
| Avance Gas Holding |
Beijing MediaLimited and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and Avance Gas
The main advantage of trading using opposite Beijing MediaLimited and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
| Avance Gas vs. Treasury Wine Estates | Avance Gas vs. Coeur Mining | Avance Gas vs. VIVA WINE GROUP | Avance Gas vs. MCEWEN MINING INC |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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