Correlation Between Arca Continental and Beijing Enterprises
Can any of the company-specific risk be diversified away by investing in both Arca Continental and Beijing Enterprises 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 Arca Continental and Beijing Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arca Continental SAB and Beijing Enterprises Holdings, you can compare the effects of market volatilities on Arca Continental and Beijing Enterprises 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 Arca Continental with a short position of Beijing Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arca Continental and Beijing Enterprises.
Diversification Opportunities for Arca Continental and Beijing Enterprises
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arca and Beijing is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arca Continental SAB and Beijing Enterprises Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enterprises and Arca Continental 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 Arca Continental SAB are associated (or correlated) with Beijing Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enterprises has no effect on the direction of Arca Continental i.e., Arca Continental and Beijing Enterprises go up and down completely randomly.
Pair Corralation between Arca Continental and Beijing Enterprises
If you would invest 953.00 in Arca Continental SAB on December 7, 2024 and sell it today you would earn a total of 74.00 from holding Arca Continental SAB or generate 7.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Arca Continental SAB vs. Beijing Enterprises Holdings
Performance |
Timeline |
Arca Continental SAB |
Beijing Enterprises |
Arca Continental and Beijing Enterprises Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arca Continental and Beijing Enterprises
The main advantage of trading using opposite Arca Continental and Beijing Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arca Continental position performs unexpectedly, Beijing Enterprises 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 Enterprises will offset losses from the drop in Beijing Enterprises' long position.Arca Continental vs. The Coca Cola | Arca Continental vs. Monster Beverage Corp | Arca Continental vs. Celsius Holdings | Arca Continental vs. Coca Cola Consolidated |
Beijing Enterprises vs. Honeywell International | Beijing Enterprises vs. MDU Resources Group | Beijing Enterprises vs. Compass Diversified Holdings | Beijing Enterprises vs. Valmont 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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