Correlation Between Wonders Information and Beijing Bashi

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

By analyzing existing cross correlation between Wonders Information and Beijing Bashi Media, you can compare the effects of market volatilities on Wonders Information and Beijing Bashi 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 Wonders Information with a short position of Beijing Bashi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonders Information and Beijing Bashi.

Diversification Opportunities for Wonders Information and Beijing Bashi

0.0

Correlation Coefficient

Wonders Information  Beijing Bashi

Pay attention - limited upside

The 3 months correlation between Wonders and Beijing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wonders Information and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media and Wonders Information 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 Wonders Information are associated (or correlated) with Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of Wonders Information i.e., Wonders Information and Beijing Bashi go up and down completely randomly.

Pair Corralation between Wonders Information and Beijing Bashi

If you would invest (100.00) in Beijing Bashi Media on October 25, 2024 and sell it today you would earn a total of  100.00  from holding Beijing Bashi Media or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wonders Information  vs.  Beijing Bashi Media

Wonders Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wonders Information has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wonders Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Beijing Bashi Media

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Beijing Bashi Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beijing Bashi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wonders Information and Beijing Bashi

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

The idea behind Wonders Information and Beijing Bashi Media 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.