Correlation Between Beijing Tong and Sugi Holdings

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

Diversification Opportunities for Beijing Tong and Sugi Holdings

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Beijing and Sugi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Tong Ren and Sugi Holdings CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sugi Holdings CoLtd and Beijing Tong 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 Tong Ren are associated (or correlated) with Sugi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sugi Holdings CoLtd has no effect on the direction of Beijing Tong i.e., Beijing Tong and Sugi Holdings go up and down completely randomly.

Pair Corralation between Beijing Tong and Sugi Holdings

Assuming the 90 days horizon Beijing Tong is expected to generate 2.2 times less return on investment than Sugi Holdings. But when comparing it to its historical volatility, Beijing Tong Ren is 1.13 times less risky than Sugi Holdings. It trades about 0.07 of its potential returns per unit of risk. Sugi Holdings CoLtd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,820  in Sugi Holdings CoLtd on April 23, 2025 and sell it today you would earn a total of  280.00  from holding Sugi Holdings CoLtd or generate 15.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Beijing Tong Ren  vs.  Sugi Holdings CoLtd

 Performance 
       Timeline  
Beijing Tong Ren 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Tong Ren are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Beijing Tong may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Sugi Holdings CoLtd 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sugi Holdings CoLtd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sugi Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Beijing Tong and Sugi Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beijing Tong and Sugi Holdings

The main advantage of trading using opposite Beijing Tong and Sugi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Tong position performs unexpectedly, Sugi Holdings 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 Sugi Holdings will offset losses from the drop in Sugi Holdings' long position.
The idea behind Beijing Tong Ren and Sugi Holdings CoLtd 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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