Correlation Between Beijing Shunxin and Tongding Interconnection
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By analyzing existing cross correlation between Beijing Shunxin Agriculture and Tongding Interconnection Information, you can compare the effects of market volatilities on Beijing Shunxin and Tongding Interconnection 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 Shunxin with a short position of Tongding Interconnection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shunxin and Tongding Interconnection.
Diversification Opportunities for Beijing Shunxin and Tongding Interconnection
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Tongding is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shunxin Agriculture and Tongding Interconnection Infor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongding Interconnection and Beijing Shunxin 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 Shunxin Agriculture are associated (or correlated) with Tongding Interconnection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongding Interconnection has no effect on the direction of Beijing Shunxin i.e., Beijing Shunxin and Tongding Interconnection go up and down completely randomly.
Pair Corralation between Beijing Shunxin and Tongding Interconnection
Assuming the 90 days trading horizon Beijing Shunxin is expected to generate 2.17 times less return on investment than Tongding Interconnection. But when comparing it to its historical volatility, Beijing Shunxin Agriculture is 1.76 times less risky than Tongding Interconnection. It trades about 0.15 of its potential returns per unit of risk. Tongding Interconnection Information is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Tongding Interconnection Information on September 26, 2024 and sell it today you would earn a total of 65.00 from holding Tongding Interconnection Information or generate 14.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Shunxin Agriculture vs. Tongding Interconnection Infor
Performance |
Timeline |
Beijing Shunxin Agri |
Tongding Interconnection |
Beijing Shunxin and Tongding Interconnection Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Shunxin and Tongding Interconnection
The main advantage of trading using opposite Beijing Shunxin and Tongding Interconnection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shunxin position performs unexpectedly, Tongding Interconnection 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 Tongding Interconnection will offset losses from the drop in Tongding Interconnection's long position.Beijing Shunxin vs. PetroChina Co Ltd | Beijing Shunxin vs. China Mobile Limited | Beijing Shunxin vs. CNOOC Limited | Beijing Shunxin vs. Ping An Insurance |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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