Correlation Between Beijing Wantai and China Railway
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By analyzing existing cross correlation between Beijing Wantai Biological and China Railway Construction, you can compare the effects of market volatilities on Beijing Wantai and China Railway 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 Wantai with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and China Railway.
Diversification Opportunities for Beijing Wantai and China Railway
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Beijing Wantai 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 Wantai Biological are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Beijing Wantai i.e., Beijing Wantai and China Railway go up and down completely randomly.
Pair Corralation between Beijing Wantai and China Railway
Assuming the 90 days trading horizon Beijing Wantai is expected to generate 2.72 times less return on investment than China Railway. But when comparing it to its historical volatility, Beijing Wantai Biological is 1.19 times less risky than China Railway. It trades about 0.1 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 338.00 in China Railway Construction on September 7, 2024 and sell it today you would earn a total of 140.00 from holding China Railway Construction or generate 41.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Wantai Biological vs. China Railway Construction
Performance |
Timeline |
Beijing Wantai Biological |
China Railway Constr |
Beijing Wantai and China Railway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Wantai and China Railway
The main advantage of trading using opposite Beijing Wantai and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.Beijing Wantai vs. Jiangsu Phoenix Publishing | Beijing Wantai vs. Quectel Wireless Solutions | Beijing Wantai vs. Xiamen Jihong Package | Beijing Wantai vs. Xinhua Winshare Publishing |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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