Correlation Between Beijing Kaiwen and Hubei Xingfa
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By analyzing existing cross correlation between Beijing Kaiwen Education and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Beijing Kaiwen and Hubei Xingfa 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 Kaiwen with a short position of Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kaiwen and Hubei Xingfa.
Diversification Opportunities for Beijing Kaiwen and Hubei Xingfa
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Hubei is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kaiwen Education and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals and Beijing Kaiwen 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 Kaiwen Education are associated (or correlated) with Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Beijing Kaiwen i.e., Beijing Kaiwen and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Beijing Kaiwen and Hubei Xingfa
Assuming the 90 days trading horizon Beijing Kaiwen Education is expected to under-perform the Hubei Xingfa. In addition to that, Beijing Kaiwen is 2.04 times more volatile than Hubei Xingfa Chemicals. It trades about -0.02 of its total potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about 0.0 per unit of volatility. If you would invest 2,221 in Hubei Xingfa Chemicals on October 21, 2024 and sell it today you would lose (18.00) from holding Hubei Xingfa Chemicals or give up 0.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Kaiwen Education vs. Hubei Xingfa Chemicals
Performance |
Timeline |
Beijing Kaiwen Education |
Hubei Xingfa Chemicals |
Beijing Kaiwen and Hubei Xingfa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Kaiwen and Hubei Xingfa
The main advantage of trading using opposite Beijing Kaiwen and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kaiwen position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.Beijing Kaiwen vs. Shenzhen Centralcon Investment | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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