Correlation Between 3onedata and Beijing Bashi

Can any of the company-specific risk be diversified away by investing in both 3onedata and Beijing Bashi 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 3onedata and Beijing Bashi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3onedata Co Ltd and Beijing Bashi Media, you can compare the effects of market volatilities on 3onedata and Beijing Bashi 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 3onedata with a short position of Beijing Bashi. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3onedata and Beijing Bashi.

Diversification Opportunities for 3onedata and Beijing Bashi

0.79

Correlation Coefficient

3onedata  Beijing Bashi

Poor diversification

The 3 months correlation between 3onedata and Beijing is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding 3onedata Co Ltd and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media and 3onedata 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 3onedata Co Ltd are associated (or correlated) with Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of 3onedata i.e., 3onedata and Beijing Bashi go up and down completely randomly.

Pair Corralation between 3onedata and Beijing Bashi

Assuming the 90 days trading horizon 3onedata Co Ltd is expected to under-perform the Beijing Bashi. But the stock apears to be less risky and, when comparing its historical volatility, 3onedata Co Ltd is 1.06 times less risky than Beijing Bashi. The stock trades about 0.0 of its potential returns per unit of risk. The Beijing Bashi Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  486.00  in Beijing Bashi Media on December 27, 2024 and sell it today you would earn a total of  14.00  from holding Beijing Bashi Media or generate 2.88% return on investment over 90 days.

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

3onedata Co Ltd  vs.  Beijing Bashi Media

3onedata

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3onedata Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 3onedata is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Beijing Bashi Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Bashi Media are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Beijing Bashi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 3onedata and Beijing Bashi

The main advantage of trading using opposite 3onedata and Beijing Bashi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3onedata position performs unexpectedly, Beijing Bashi 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 Beijing Bashi will offset losses from the drop in Beijing Bashi's long position.

The idea behind 3onedata Co Ltd and Beijing Bashi Media 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.