Correlation Between PetMed Express and Beijing Tong
Can any of the company-specific risk be diversified away by investing in both PetMed Express and Beijing Tong 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 PetMed Express and Beijing Tong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetMed Express and Beijing Tong Ren, you can compare the effects of market volatilities on PetMed Express and Beijing Tong 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 PetMed Express with a short position of Beijing Tong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetMed Express and Beijing Tong.
Diversification Opportunities for PetMed Express and Beijing Tong
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PetMed and Beijing is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding PetMed Express and Beijing Tong Ren in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Tong Ren and PetMed Express 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 PetMed Express are associated (or correlated) with Beijing Tong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Tong Ren has no effect on the direction of PetMed Express i.e., PetMed Express and Beijing Tong go up and down completely randomly.
Pair Corralation between PetMed Express and Beijing Tong
Assuming the 90 days horizon PetMed Express is expected to generate 3.64 times more return on investment than Beijing Tong. However, PetMed Express is 3.64 times more volatile than Beijing Tong Ren. It trades about 0.17 of its potential returns per unit of risk. Beijing Tong Ren is currently generating about 0.01 per unit of risk. If you would invest 516.00 in PetMed Express on September 12, 2024 and sell it today you would earn a total of 98.00 from holding PetMed Express or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetMed Express vs. Beijing Tong Ren
Performance |
| Timeline |
| PetMed Express |
| Beijing Tong Ren |
PetMed Express and Beijing Tong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetMed Express and Beijing Tong
The main advantage of trading using opposite PetMed Express and Beijing Tong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetMed Express position performs unexpectedly, Beijing Tong 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 Tong will offset losses from the drop in Beijing Tong's long position.| PetMed Express vs. Walgreens Boots Alliance | PetMed Express vs. Alibaba Health Information | PetMed Express vs. Sugi Holdings CoLtd | PetMed Express vs. Beijing Tong Ren |
| Beijing Tong vs. REGAL ASIAN INVESTMENTS | Beijing Tong vs. Jacquet Metal Service | Beijing Tong vs. AGNC INVESTMENT | Beijing Tong vs. Evolution Mining Limited |
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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