Correlation Between Beijing Kingsoft and Chengdu Kanghua
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By analyzing existing cross correlation between Beijing Kingsoft Office and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Beijing Kingsoft and Chengdu Kanghua 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 Kingsoft with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kingsoft and Chengdu Kanghua.
Diversification Opportunities for Beijing Kingsoft and Chengdu Kanghua
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Beijing and Chengdu is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kingsoft Office and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Beijing Kingsoft 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 Kingsoft Office are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Beijing Kingsoft i.e., Beijing Kingsoft and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Beijing Kingsoft and Chengdu Kanghua
Assuming the 90 days trading horizon Beijing Kingsoft Office is expected to generate 1.5 times more return on investment than Chengdu Kanghua. However, Beijing Kingsoft is 1.5 times more volatile than Chengdu Kanghua Biological. It trades about -0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.2 per unit of risk. If you would invest 31,686 in Beijing Kingsoft Office on October 5, 2024 and sell it today you would lose (5,020) from holding Beijing Kingsoft Office or give up 15.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Kingsoft Office vs. Chengdu Kanghua Biological
Performance |
Timeline |
Beijing Kingsoft Office |
Chengdu Kanghua Biol |
Beijing Kingsoft and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Kingsoft and Chengdu Kanghua
The main advantage of trading using opposite Beijing Kingsoft and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kingsoft position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.Beijing Kingsoft vs. Fuda Alloy Materials | Beijing Kingsoft vs. King Strong New Material | Beijing Kingsoft vs. Cangzhou Mingzhu Plastic | Beijing Kingsoft vs. Kidswant Children Products |
Chengdu Kanghua vs. Miracll Chemicals Co | Chengdu Kanghua vs. Guizhou Chanhen Chemical | Chengdu Kanghua vs. UE Furniture Co | Chengdu Kanghua vs. North Chemical Industries |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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