Correlation Between MDU Resources and Beijing Enterprises
Can any of the company-specific risk be diversified away by investing in both MDU Resources 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 MDU Resources and Beijing Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDU Resources Group and Beijing Enterprises Holdings, you can compare the effects of market volatilities on MDU Resources 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 MDU Resources with a short position of Beijing Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDU Resources and Beijing Enterprises.
Diversification Opportunities for MDU Resources and Beijing Enterprises
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MDU and Beijing is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MDU Resources Group and Beijing Enterprises Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enterprises and MDU Resources 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 MDU Resources Group 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 MDU Resources i.e., MDU Resources and Beijing Enterprises go up and down completely randomly.
Pair Corralation between MDU Resources and Beijing Enterprises
If you would invest 1,617 in MDU Resources Group on August 30, 2024 and sell it today you would earn a total of 388.00 from holding MDU Resources Group or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDU Resources Group vs. Beijing Enterprises Holdings
Performance |
| Timeline |
| MDU Resources Group |
| Beijing Enterprises |
MDU Resources and Beijing Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDU Resources and Beijing Enterprises
The main advantage of trading using opposite MDU Resources and Beijing Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDU Resources 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.| MDU Resources vs. Griffon | MDU Resources vs. Brookfield Business Partners | MDU Resources vs. Matthews International | MDU Resources vs. Steel Partners Holdings |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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