Correlation Between China Asset and Wuhan Yangtze
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By analyzing existing cross correlation between China Asset Management and Wuhan Yangtze Communication, you can compare the effects of market volatilities on China Asset and Wuhan Yangtze 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 China Asset with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Wuhan Yangtze.
Diversification Opportunities for China Asset and Wuhan Yangtze
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Wuhan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun and China Asset 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 China Asset Management are associated (or correlated) with Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of China Asset i.e., China Asset and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between China Asset and Wuhan Yangtze
Assuming the 90 days trading horizon China Asset Management is expected to generate 0.29 times more return on investment than Wuhan Yangtze. However, China Asset Management is 3.41 times less risky than Wuhan Yangtze. It trades about 0.42 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about -0.06 per unit of risk. If you would invest 315.00 in China Asset Management on September 26, 2024 and sell it today you would earn a total of 38.00 from holding China Asset Management or generate 12.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Asset Management vs. Wuhan Yangtze Communication
Performance |
Timeline |
China Asset Management |
Wuhan Yangtze Commun |
China Asset and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Asset and Wuhan Yangtze
The main advantage of trading using opposite China Asset and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.China Asset vs. Industrial and Commercial | China Asset vs. Kweichow Moutai Co | China Asset vs. Agricultural Bank of | China Asset vs. China Mobile Limited |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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