Correlation Between Beijing Sanyuan and Sichuan Furong
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Sichuan Furong Technology, you can compare the effects of market volatilities on Beijing Sanyuan and Sichuan Furong 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 Sanyuan with a short position of Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Sichuan Furong.
Diversification Opportunities for Beijing Sanyuan and Sichuan Furong
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Sichuan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology and Beijing Sanyuan 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 Sanyuan Foods are associated (or correlated) with Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and Sichuan Furong go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Sichuan Furong
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to generate 0.56 times more return on investment than Sichuan Furong. However, Beijing Sanyuan Foods is 1.77 times less risky than Sichuan Furong. It trades about 0.24 of its potential returns per unit of risk. Sichuan Furong Technology is currently generating about 0.12 per unit of risk. If you would invest 361.00 in Beijing Sanyuan Foods on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Beijing Sanyuan Foods or generate 34.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.28% |
Values | Daily Returns |
Beijing Sanyuan Foods vs. Sichuan Furong Technology
Performance |
Timeline |
Beijing Sanyuan Foods |
Sichuan Furong Technology |
Beijing Sanyuan and Sichuan Furong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Sanyuan and Sichuan Furong
The main advantage of trading using opposite Beijing Sanyuan and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
Sichuan Furong vs. Ligao Foods CoLtd | Sichuan Furong vs. Beijing Sanyuan Foods | Sichuan Furong vs. Muyuan Foodstuff Co | Sichuan Furong vs. Shanghai Ziyan Foods |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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