Correlation Between Poly Real and Beijing Bewinner

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

By analyzing existing cross correlation between Poly Real Estate and Beijing Bewinner Communications, you can compare the effects of market volatilities on Poly Real and Beijing Bewinner 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 Poly Real with a short position of Beijing Bewinner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poly Real and Beijing Bewinner.

Diversification Opportunities for Poly Real and Beijing Bewinner

-0.41

Correlation Coefficient

Poly Real  Beijing Bewinner

Very good diversification

The 3 months correlation between Poly and Beijing is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Poly Real Estate and Beijing Bewinner Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bewinner Com and Poly Real 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 Poly Real Estate are associated (or correlated) with Beijing Bewinner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bewinner Com has no effect on the direction of Poly Real i.e., Poly Real and Beijing Bewinner go up and down completely randomly.

Pair Corralation between Poly Real and Beijing Bewinner

Assuming the 90 days trading horizon Poly Real Estate is expected to under-perform the Beijing Bewinner. But the stock apears to be less risky and, when comparing its historical volatility, Poly Real Estate is 4.37 times less risky than Beijing Bewinner. The stock trades about -0.52 of its potential returns per unit of risk. The Beijing Bewinner Communications is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  648.00  in Beijing Bewinner Communications on October 8, 2024 and sell it today you would lose (46.00) from holding Beijing Bewinner Communications or give up 7.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Poly Real Estate  vs.  Beijing Bewinner Communication

Poly Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poly Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beijing Bewinner Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Bewinner Communications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beijing Bewinner may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Poly Real and Beijing Bewinner

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

The idea behind Poly Real Estate and Beijing Bewinner Communications 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.

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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.