Correlation Between Beijing HuaYuanYiTong and Shantou Wanshun
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By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Shantou Wanshun Package, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Shantou Wanshun 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 HuaYuanYiTong with a short position of Shantou Wanshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Shantou Wanshun.
Diversification Opportunities for Beijing HuaYuanYiTong and Shantou Wanshun
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Shantou is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Shantou Wanshun Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantou Wanshun Package and Beijing HuaYuanYiTong 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 HuaYuanYiTong Thermal are associated (or correlated) with Shantou Wanshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantou Wanshun Package has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Shantou Wanshun go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Shantou Wanshun
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to generate 1.05 times more return on investment than Shantou Wanshun. However, Beijing HuaYuanYiTong is 1.05 times more volatile than Shantou Wanshun Package. It trades about 0.02 of its potential returns per unit of risk. Shantou Wanshun Package is currently generating about -0.03 per unit of risk. If you would invest 867.00 in Beijing HuaYuanYiTong Thermal on October 10, 2024 and sell it today you would earn a total of 93.00 from holding Beijing HuaYuanYiTong Thermal or generate 10.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing HuaYuanYiTong Thermal vs. Shantou Wanshun Package
Performance |
Timeline |
Beijing HuaYuanYiTong |
Shantou Wanshun Package |
Beijing HuaYuanYiTong and Shantou Wanshun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing HuaYuanYiTong and Shantou Wanshun
The main advantage of trading using opposite Beijing HuaYuanYiTong and Shantou Wanshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Shantou Wanshun 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 Shantou Wanshun will offset losses from the drop in Shantou Wanshun's long position.Beijing HuaYuanYiTong vs. Biwin Storage Technology | Beijing HuaYuanYiTong vs. PetroChina Co Ltd | Beijing HuaYuanYiTong vs. Industrial and Commercial | Beijing HuaYuanYiTong vs. China Construction Bank |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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