Correlation Between Qinghai Salt and Wankai New
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By analyzing existing cross correlation between Qinghai Salt Lake and Wankai New Materials, you can compare the effects of market volatilities on Qinghai Salt and Wankai New 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 Qinghai Salt with a short position of Wankai New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinghai Salt and Wankai New.
Diversification Opportunities for Qinghai Salt and Wankai New
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qinghai and Wankai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Qinghai Salt Lake and Wankai New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wankai New Materials and Qinghai Salt 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 Qinghai Salt Lake are associated (or correlated) with Wankai New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wankai New Materials has no effect on the direction of Qinghai Salt i.e., Qinghai Salt and Wankai New go up and down completely randomly.
Pair Corralation between Qinghai Salt and Wankai New
Assuming the 90 days trading horizon Qinghai Salt Lake is expected to under-perform the Wankai New. In addition to that, Qinghai Salt is 1.13 times more volatile than Wankai New Materials. It trades about -0.08 of its total potential returns per unit of risk. Wankai New Materials is currently generating about -0.06 per unit of volatility. If you would invest 1,134 in Wankai New Materials on September 23, 2024 and sell it today you would lose (61.00) from holding Wankai New Materials or give up 5.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qinghai Salt Lake vs. Wankai New Materials
Performance |
Timeline |
Qinghai Salt Lake |
Wankai New Materials |
Qinghai Salt and Wankai New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qinghai Salt and Wankai New
The main advantage of trading using opposite Qinghai Salt and Wankai New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinghai Salt position performs unexpectedly, Wankai New 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 Wankai New will offset losses from the drop in Wankai New's long position.Qinghai Salt vs. Zijin Mining Group | Qinghai Salt vs. Wanhua Chemical Group | Qinghai Salt vs. Baoshan Iron Steel | Qinghai Salt vs. Shandong Gold Mining |
Wankai New vs. Zijin Mining Group | Wankai New vs. Wanhua Chemical Group | Wankai New vs. Baoshan Iron Steel | Wankai New vs. Shandong Gold Mining |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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