Correlation Between Hangzhou Weiguang and Xilong Chemical
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and Xilong Chemical Co, you can compare the effects of market volatilities on Hangzhou Weiguang and Xilong Chemical 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 Hangzhou Weiguang with a short position of Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and Xilong Chemical.
Diversification Opportunities for Hangzhou Weiguang and Xilong Chemical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hangzhou and Xilong is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical and Hangzhou Weiguang 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 Hangzhou Weiguang Electronic are associated (or correlated) with Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Hangzhou Weiguang i.e., Hangzhou Weiguang and Xilong Chemical go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and Xilong Chemical
Assuming the 90 days trading horizon Hangzhou Weiguang Electronic is expected to generate 1.83 times more return on investment than Xilong Chemical. However, Hangzhou Weiguang is 1.83 times more volatile than Xilong Chemical Co. It trades about 0.2 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.08 per unit of risk. If you would invest 2,515 in Hangzhou Weiguang Electronic on December 30, 2024 and sell it today you would earn a total of 1,370 from holding Hangzhou Weiguang Electronic or generate 54.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hangzhou Weiguang Electronic vs. Xilong Chemical Co
Performance |
Timeline |
Hangzhou Weiguang |
Xilong Chemical |
Hangzhou Weiguang and Xilong Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hangzhou Weiguang and Xilong Chemical
The main advantage of trading using opposite Hangzhou Weiguang and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.Hangzhou Weiguang vs. Zhejiang Publishing Media | Hangzhou Weiguang vs. China Publishing Media | Hangzhou Weiguang vs. COL Digital Publishing | Hangzhou Weiguang vs. Changjiang Publishing Media |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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