Correlation Between Weichai Heavy and Qilu Bank
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By analyzing existing cross correlation between Weichai Heavy Machinery and Qilu Bank Co, you can compare the effects of market volatilities on Weichai Heavy and Qilu Bank 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 Weichai Heavy with a short position of Qilu Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Qilu Bank.
Diversification Opportunities for Weichai Heavy and Qilu Bank
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weichai and Qilu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Qilu Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilu Bank and Weichai Heavy 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 Weichai Heavy Machinery are associated (or correlated) with Qilu Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilu Bank has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Qilu Bank go up and down completely randomly.
Pair Corralation between Weichai Heavy and Qilu Bank
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.85 times more return on investment than Qilu Bank. However, Weichai Heavy is 1.85 times more volatile than Qilu Bank Co. It trades about 0.06 of its potential returns per unit of risk. Qilu Bank Co is currently generating about 0.05 per unit of risk. If you would invest 931.00 in Weichai Heavy Machinery on October 5, 2024 and sell it today you would earn a total of 819.00 from holding Weichai Heavy Machinery or generate 87.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Weichai Heavy Machinery vs. Qilu Bank Co
Performance |
Timeline |
Weichai Heavy Machinery |
Qilu Bank |
Weichai Heavy and Qilu Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weichai Heavy and Qilu Bank
The main advantage of trading using opposite Weichai Heavy and Qilu Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Qilu Bank 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 Qilu Bank will offset losses from the drop in Qilu Bank's long position.Weichai Heavy vs. Industrial and Commercial | Weichai Heavy vs. China Construction Bank | Weichai Heavy vs. Agricultural Bank of | Weichai Heavy 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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