Correlation Between Beijing Mainstreets and Liaoning Chengda
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By analyzing existing cross correlation between Beijing Mainstreets Investment and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Beijing Mainstreets and Liaoning Chengda 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 Mainstreets with a short position of Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Mainstreets and Liaoning Chengda.
Diversification Opportunities for Beijing Mainstreets and Liaoning Chengda
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beijing and Liaoning is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Mainstreets Investment and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio and Beijing Mainstreets 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 Mainstreets Investment are associated (or correlated) with Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Beijing Mainstreets i.e., Beijing Mainstreets and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Beijing Mainstreets and Liaoning Chengda
Assuming the 90 days trading horizon Beijing Mainstreets Investment is expected to under-perform the Liaoning Chengda. In addition to that, Beijing Mainstreets is 2.35 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.05 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.04 per unit of volatility. If you would invest 3,291 in Liaoning Chengda Biotechnology on October 5, 2024 and sell it today you would lose (798.00) from holding Liaoning Chengda Biotechnology or give up 24.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Mainstreets Investment vs. Liaoning Chengda Biotechnology
Performance |
Timeline |
Beijing Mainstreets |
Liaoning Chengda Bio |
Beijing Mainstreets and Liaoning Chengda Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Mainstreets and Liaoning Chengda
The main advantage of trading using opposite Beijing Mainstreets and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Mainstreets position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.Beijing Mainstreets vs. Kweichow Moutai Co | Beijing Mainstreets vs. Contemporary Amperex Technology | Beijing Mainstreets vs. G bits Network Technology | Beijing Mainstreets vs. Beijing Roborock Technology |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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