Correlation Between Hubei Dinglong and Beijing Kaiwen
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By analyzing existing cross correlation between Hubei Dinglong Chemical and Beijing Kaiwen Education, you can compare the effects of market volatilities on Hubei Dinglong and Beijing Kaiwen 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 Hubei Dinglong with a short position of Beijing Kaiwen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and Beijing Kaiwen.
Diversification Opportunities for Hubei Dinglong and Beijing Kaiwen
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Beijing is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and Beijing Kaiwen Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kaiwen Education and Hubei Dinglong 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 Hubei Dinglong Chemical are associated (or correlated) with Beijing Kaiwen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kaiwen Education has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and Beijing Kaiwen go up and down completely randomly.
Pair Corralation between Hubei Dinglong and Beijing Kaiwen
Assuming the 90 days trading horizon Hubei Dinglong is expected to generate 1.19 times less return on investment than Beijing Kaiwen. But when comparing it to its historical volatility, Hubei Dinglong Chemical is 1.07 times less risky than Beijing Kaiwen. It trades about 0.18 of its potential returns per unit of risk. Beijing Kaiwen Education is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 375.00 in Beijing Kaiwen Education on September 16, 2024 and sell it today you would earn a total of 202.00 from holding Beijing Kaiwen Education or generate 53.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hubei Dinglong Chemical vs. Beijing Kaiwen Education
Performance |
Timeline |
Hubei Dinglong Chemical |
Beijing Kaiwen Education |
Hubei Dinglong and Beijing Kaiwen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hubei Dinglong and Beijing Kaiwen
The main advantage of trading using opposite Hubei Dinglong and Beijing Kaiwen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong position performs unexpectedly, Beijing Kaiwen 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 Beijing Kaiwen will offset losses from the drop in Beijing Kaiwen's long position.Hubei Dinglong vs. HUAQIN TECHNOLOGY LTD | Hubei Dinglong vs. Holitech Technology Co | Hubei Dinglong vs. Lingyuan Iron Steel | Hubei Dinglong vs. Kuang Chi Technologies |
Beijing Kaiwen vs. China Publishing Media | Beijing Kaiwen vs. Shenzhen Bioeasy Biotechnology | Beijing Kaiwen vs. Bloomage Biotechnology Corp | Beijing Kaiwen vs. Jiangsu Phoenix Publishing |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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