Correlation Between Beijing Yanjing and Jinhui Liquor
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By analyzing existing cross correlation between Beijing Yanjing Brewery and Jinhui Liquor Co, you can compare the effects of market volatilities on Beijing Yanjing and Jinhui Liquor 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 Yanjing with a short position of Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Yanjing and Jinhui Liquor.
Diversification Opportunities for Beijing Yanjing and Jinhui Liquor
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Jinhui is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Yanjing Brewery and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor and Beijing Yanjing 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 Yanjing Brewery are associated (or correlated) with Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Beijing Yanjing i.e., Beijing Yanjing and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Beijing Yanjing and Jinhui Liquor
Assuming the 90 days trading horizon Beijing Yanjing Brewery is expected to generate 0.88 times more return on investment than Jinhui Liquor. However, Beijing Yanjing Brewery is 1.14 times less risky than Jinhui Liquor. It trades about 0.02 of its potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.02 per unit of risk. If you would invest 1,066 in Beijing Yanjing Brewery on October 11, 2024 and sell it today you would earn a total of 97.00 from holding Beijing Yanjing Brewery or generate 9.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Yanjing Brewery vs. Jinhui Liquor Co
Performance |
Timeline |
Beijing Yanjing Brewery |
Jinhui Liquor |
Beijing Yanjing and Jinhui Liquor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Yanjing and Jinhui Liquor
The main advantage of trading using opposite Beijing Yanjing and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Yanjing position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.Beijing Yanjing vs. Shandong Rike Chemical | Beijing Yanjing vs. Shenyang Chemical Industry | Beijing Yanjing vs. SUNSEA Telecommunications Co | Beijing Yanjing vs. Dosilicon Co |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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