Correlation Between Sichuan Newsnet and Beijing Jiaman
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By analyzing existing cross correlation between Sichuan Newsnet Media and Beijing Jiaman Dress, you can compare the effects of market volatilities on Sichuan Newsnet and Beijing Jiaman 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 Sichuan Newsnet with a short position of Beijing Jiaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Newsnet and Beijing Jiaman.
Diversification Opportunities for Sichuan Newsnet and Beijing Jiaman
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Beijing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Newsnet Media and Beijing Jiaman Dress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Jiaman Dress and Sichuan Newsnet 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 Sichuan Newsnet Media are associated (or correlated) with Beijing Jiaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Jiaman Dress has no effect on the direction of Sichuan Newsnet i.e., Sichuan Newsnet and Beijing Jiaman go up and down completely randomly.
Pair Corralation between Sichuan Newsnet and Beijing Jiaman
Assuming the 90 days trading horizon Sichuan Newsnet Media is expected to generate 1.62 times more return on investment than Beijing Jiaman. However, Sichuan Newsnet is 1.62 times more volatile than Beijing Jiaman Dress. It trades about 0.03 of its potential returns per unit of risk. Beijing Jiaman Dress is currently generating about 0.04 per unit of risk. If you would invest 1,644 in Sichuan Newsnet Media on September 23, 2024 and sell it today you would earn a total of 32.00 from holding Sichuan Newsnet Media or generate 1.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Newsnet Media vs. Beijing Jiaman Dress
Performance |
Timeline |
Sichuan Newsnet Media |
Beijing Jiaman Dress |
Sichuan Newsnet and Beijing Jiaman Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Newsnet and Beijing Jiaman
The main advantage of trading using opposite Sichuan Newsnet and Beijing Jiaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Newsnet position performs unexpectedly, Beijing Jiaman 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 Jiaman will offset losses from the drop in Beijing Jiaman's long position.Sichuan Newsnet vs. Industrial and Commercial | Sichuan Newsnet vs. Agricultural Bank of | Sichuan Newsnet vs. China Construction Bank | Sichuan Newsnet vs. Bank of China |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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