Correlation Between Beijing Seeyon and Digiwin Software

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Can any of the company-specific risk be diversified away by investing in both Beijing Seeyon and Digiwin Software 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 Beijing Seeyon and Digiwin Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Seeyon Internet and Digiwin Software Co, you can compare the effects of market volatilities on Beijing Seeyon and Digiwin Software 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 Seeyon with a short position of Digiwin Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Seeyon and Digiwin Software.

Diversification Opportunities for Beijing Seeyon and Digiwin Software

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Beijing and Digiwin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Seeyon Internet and Digiwin Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digiwin Software and Beijing Seeyon 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 Seeyon Internet are associated (or correlated) with Digiwin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digiwin Software has no effect on the direction of Beijing Seeyon i.e., Beijing Seeyon and Digiwin Software go up and down completely randomly.

Pair Corralation between Beijing Seeyon and Digiwin Software

Assuming the 90 days trading horizon Beijing Seeyon Internet is expected to under-perform the Digiwin Software. In addition to that, Beijing Seeyon is 1.14 times more volatile than Digiwin Software Co. It trades about -0.47 of its total potential returns per unit of risk. Digiwin Software Co is currently generating about -0.5 per unit of volatility. If you would invest  3,126  in Digiwin Software Co on October 9, 2024 and sell it today you would lose (850.00) from holding Digiwin Software Co or give up 27.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Beijing Seeyon Internet  vs.  Digiwin Software Co

 Performance 
       Timeline  
Beijing Seeyon Internet 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beijing Seeyon Internet 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.
Digiwin Software 

Risk-Adjusted Performance

0 of 100

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

Beijing Seeyon and Digiwin Software Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beijing Seeyon and Digiwin Software

The main advantage of trading using opposite Beijing Seeyon and Digiwin Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Seeyon position performs unexpectedly, Digiwin Software 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 Digiwin Software will offset losses from the drop in Digiwin Software's long position.
The idea behind Beijing Seeyon Internet and Digiwin Software Co 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.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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