Correlation Between Beijing Tong and Oriola Oyj
Can any of the company-specific risk be diversified away by investing in both Beijing Tong and Oriola Oyj 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 Tong and Oriola Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Tong Ren and Oriola Oyj, you can compare the effects of market volatilities on Beijing Tong and Oriola Oyj 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 Tong with a short position of Oriola Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Tong and Oriola Oyj.
Diversification Opportunities for Beijing Tong and Oriola Oyj
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beijing and Oriola is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Tong Ren and Oriola Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola Oyj and Beijing Tong 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 Tong Ren are associated (or correlated) with Oriola Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola Oyj has no effect on the direction of Beijing Tong i.e., Beijing Tong and Oriola Oyj go up and down completely randomly.
Pair Corralation between Beijing Tong and Oriola Oyj
Assuming the 90 days horizon Beijing Tong Ren is expected to generate 0.78 times more return on investment than Oriola Oyj. However, Beijing Tong Ren is 1.28 times less risky than Oriola Oyj. It trades about 0.01 of its potential returns per unit of risk. Oriola Oyj is currently generating about -0.07 per unit of risk. If you would invest 98.00 in Beijing Tong Ren on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Beijing Tong Ren or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Tong Ren vs. Oriola Oyj
Performance |
| Timeline |
| Beijing Tong Ren |
| Oriola Oyj |
Beijing Tong and Oriola Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Tong and Oriola Oyj
The main advantage of trading using opposite Beijing Tong and Oriola Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Tong position performs unexpectedly, Oriola Oyj 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 Oriola Oyj will offset losses from the drop in Oriola Oyj's long position.| Beijing Tong vs. REGAL ASIAN INVESTMENTS | Beijing Tong vs. Jacquet Metal Service | Beijing Tong vs. AGNC INVESTMENT | Beijing Tong vs. Evolution Mining Limited |
| Oriola Oyj vs. Walgreens Boots Alliance | Oriola Oyj vs. Alibaba Health Information | Oriola Oyj vs. Sugi Holdings CoLtd | Oriola Oyj vs. Beijing Tong Ren |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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