Correlation Between Beijing Enlight and Chongqing Sulian

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Beijing Enlight and Chongqing Sulian 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 Enlight and Chongqing Sulian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Enlight Media and Chongqing Sulian Plastic, you can compare the effects of market volatilities on Beijing Enlight and Chongqing Sulian 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 Enlight with a short position of Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Enlight and Chongqing Sulian.

Diversification Opportunities for Beijing Enlight and Chongqing Sulian

BeijingChongqingDiversified AwayBeijingChongqingDiversified Away100%
0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Beijing and Chongqing is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Enlight Media and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic and Beijing Enlight 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 Enlight Media are associated (or correlated) with Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of Beijing Enlight i.e., Beijing Enlight and Chongqing Sulian go up and down completely randomly.

Pair Corralation between Beijing Enlight and Chongqing Sulian

Assuming the 90 days trading horizon Beijing Enlight is expected to generate 2.11 times less return on investment than Chongqing Sulian. But when comparing it to its historical volatility, Beijing Enlight Media is 1.83 times less risky than Chongqing Sulian. It trades about 0.06 of its potential returns per unit of risk. Chongqing Sulian Plastic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,517  in Chongqing Sulian Plastic on October 31, 2024 and sell it today you would earn a total of  365.00  from holding Chongqing Sulian Plastic or generate 14.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Beijing Enlight Media  vs.  Chongqing Sulian Plastic

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.15300251 301397
       Timeline  
Beijing Enlight Media 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Enlight Media are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beijing Enlight may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanJan8.599.510
Chongqing Sulian Plastic 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Chongqing Sulian Plastic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chongqing Sulian sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanJan242628303234

Beijing Enlight and Chongqing Sulian Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.91-5.92-3.94-1.950.03311.994.056.118.1710.23 0.020.030.040.050.06
JavaScript chart by amCharts 3.21.15300251 301397
       Returns  

Pair Trading with Beijing Enlight and Chongqing Sulian

The main advantage of trading using opposite Beijing Enlight and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Enlight position performs unexpectedly, Chongqing Sulian 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 Chongqing Sulian will offset losses from the drop in Chongqing Sulian's long position.
The idea behind Beijing Enlight Media and Chongqing Sulian Plastic 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Money Managers
Screen money managers from public funds and ETFs managed around the world
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes