Correlation Between Honeywell International and Beijing Enterprises
Can any of the company-specific risk be diversified away by investing in both Honeywell International and Beijing Enterprises 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 Honeywell International and Beijing Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and Beijing Enterprises Holdings, you can compare the effects of market volatilities on Honeywell International and Beijing Enterprises 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 Honeywell International with a short position of Beijing Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and Beijing Enterprises.
Diversification Opportunities for Honeywell International and Beijing Enterprises
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Honeywell and Beijing is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and Beijing Enterprises Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enterprises and Honeywell International 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 Honeywell International are associated (or correlated) with Beijing Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enterprises has no effect on the direction of Honeywell International i.e., Honeywell International and Beijing Enterprises go up and down completely randomly.
Pair Corralation between Honeywell International and Beijing Enterprises
If you would invest 20,497 in Honeywell International on August 30, 2024 and sell it today you would earn a total of 2,467 from holding Honeywell International or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Honeywell International vs. Beijing Enterprises Holdings
Performance |
| Timeline |
| Honeywell International |
| Beijing Enterprises |
Honeywell International and Beijing Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and Beijing Enterprises
The main advantage of trading using opposite Honeywell International and Beijing Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, Beijing Enterprises 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 Enterprises will offset losses from the drop in Beijing Enterprises' long position.The idea behind Honeywell International and Beijing Enterprises Holdings 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.
| Beijing Enterprises vs. Honeywell International | Beijing Enterprises vs. MDU Resources Group | Beijing Enterprises vs. Compass Diversified Holdings | Beijing Enterprises vs. Valmont Industries |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |