Correlation Between Beijing Bewinner and Grandblue Environment

Can any of the company-specific risk be diversified away by investing in both Beijing Bewinner and Grandblue Environment 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 Bewinner and Grandblue Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beijing Bewinner Communications and Grandblue Environment Co, you can compare the effects of market volatilities on Beijing Bewinner and Grandblue Environment 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 Bewinner with a short position of Grandblue Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Bewinner and Grandblue Environment.

Diversification Opportunities for Beijing Bewinner and Grandblue Environment

0.27

Correlation Coefficient

Beijing Bewinner  Grandblue Environment

Modest diversification

The 3 months correlation between Beijing and Grandblue is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Bewinner Communication and Grandblue Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandblue Environment and Beijing Bewinner 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 Bewinner Communications are associated (or correlated) with Grandblue Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandblue Environment has no effect on the direction of Beijing Bewinner i.e., Beijing Bewinner and Grandblue Environment go up and down completely randomly.

Pair Corralation between Beijing Bewinner and Grandblue Environment

Assuming the 90 days trading horizon Beijing Bewinner Communications is expected to under-perform the Grandblue Environment. In addition to that, Beijing Bewinner is 4.06 times more volatile than Grandblue Environment Co. It trades about -0.04 of its total potential returns per unit of risk. Grandblue Environment Co is currently generating about 0.26 per unit of volatility. If you would invest  2,191  in Grandblue Environment Co on October 6, 2024 and sell it today you would earn a total of  174.00  from holding Grandblue Environment Co or generate 7.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Beijing Bewinner Communication  vs.  Grandblue Environment Co

Beijing Bewinner Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Bewinner Communications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beijing Bewinner may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grandblue Environment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grandblue Environment Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grandblue Environment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Beijing Bewinner and Grandblue Environment

The main advantage of trading using opposite Beijing Bewinner and Grandblue Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Bewinner position performs unexpectedly, Grandblue Environment 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 Grandblue Environment will offset losses from the drop in Grandblue Environment's long position.

The idea behind Beijing Bewinner Communications and Grandblue Environment Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.