Correlation Between Sugi Holdings and Beijing Tong
Can any of the company-specific risk be diversified away by investing in both Sugi Holdings 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 Sugi Holdings and Beijing Tong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sugi Holdings CoLtd and Beijing Tong Ren, you can compare the effects of market volatilities on Sugi Holdings 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 Sugi Holdings with a short position of Beijing Tong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sugi Holdings and Beijing Tong.
Diversification Opportunities for Sugi Holdings and Beijing Tong
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sugi and Beijing is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sugi Holdings CoLtd 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 Sugi Holdings 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 Sugi Holdings CoLtd 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 Sugi Holdings i.e., Sugi Holdings and Beijing Tong go up and down completely randomly.
Pair Corralation between Sugi Holdings and Beijing Tong
Assuming the 90 days horizon Sugi Holdings is expected to generate 2.62 times less return on investment than Beijing Tong. But when comparing it to its historical volatility, Sugi Holdings CoLtd is 2.21 times less risky than Beijing Tong. It trades about 0.04 of its potential returns per unit of risk. Beijing Tong Ren is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Beijing Tong Ren on November 5, 2024 and sell it today you would earn a total of 43.00 from holding Beijing Tong Ren or generate 74.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sugi Holdings CoLtd vs. Beijing Tong Ren
Performance |
| Timeline |
| Sugi Holdings CoLtd |
| Beijing Tong Ren |
Sugi Holdings and Beijing Tong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sugi Holdings and Beijing Tong
The main advantage of trading using opposite Sugi Holdings and Beijing Tong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sugi Holdings 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.| Sugi Holdings vs. UNIVMUSIC GRPADR050 | Sugi Holdings vs. Discover Financial Services | Sugi Holdings vs. CullenFrost Bankers | Sugi Holdings vs. UNIVERSAL MUSIC GROUP |
| Beijing Tong vs. Insurance Australia Group | Beijing Tong vs. RYU Apparel | Beijing Tong vs. ZURICH INSURANCE GROUP | Beijing Tong vs. United Insurance Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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