Correlation Between Bingo Software and Hebei Yangyuan

Can any of the company-specific risk be diversified away by investing in both Bingo Software and Hebei Yangyuan 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 Bingo Software and Hebei Yangyuan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bingo Software Co and Hebei Yangyuan ZhiHui, you can compare the effects of market volatilities on Bingo Software and Hebei Yangyuan 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 Bingo Software with a short position of Hebei Yangyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bingo Software and Hebei Yangyuan.

Diversification Opportunities for Bingo Software and Hebei Yangyuan

-0.74

Correlation Coefficient

Bingo Software  Hebei Yangyuan

Pay attention - limited upside

The 3 months correlation between Bingo and Hebei is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bingo Software Co and Hebei Yangyuan ZhiHui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hebei Yangyuan ZhiHui and Bingo Software 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 Bingo Software Co are associated (or correlated) with Hebei Yangyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hebei Yangyuan ZhiHui has no effect on the direction of Bingo Software i.e., Bingo Software and Hebei Yangyuan go up and down completely randomly.

Pair Corralation between Bingo Software and Hebei Yangyuan

Assuming the 90 days trading horizon Bingo Software Co is expected to generate 4.18 times more return on investment than Hebei Yangyuan. However, Bingo Software is 4.18 times more volatile than Hebei Yangyuan ZhiHui. It trades about 0.11 of its potential returns per unit of risk. Hebei Yangyuan ZhiHui is currently generating about -0.04 per unit of risk. If you would invest  2,661  in Bingo Software Co on December 25, 2024 and sell it today you would earn a total of  784.00  from holding Bingo Software Co or generate 29.46% return on investment over 90 days.

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

Bingo Software Co  vs.  Hebei Yangyuan ZhiHui

Bingo Software

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bingo Software Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bingo Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Hebei Yangyuan ZhiHui

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hebei Yangyuan ZhiHui has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hebei Yangyuan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bingo Software and Hebei Yangyuan

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

The idea behind Bingo Software Co and Hebei Yangyuan ZhiHui 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.