Correlation Between Wuhan Yangtze and Sinomach Automobile
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Sinomach Automobile Co, you can compare the effects of market volatilities on Wuhan Yangtze and Sinomach Automobile 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 Wuhan Yangtze with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Sinomach Automobile.
Diversification Opportunities for Wuhan Yangtze and Sinomach Automobile
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Sinomach is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Sinomach Automobile
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Sinomach Automobile. In addition to that, Wuhan Yangtze is 1.43 times more volatile than Sinomach Automobile Co. It trades about -0.06 of its total potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.03 per unit of volatility. If you would invest 662.00 in Sinomach Automobile Co on September 26, 2024 and sell it today you would earn a total of 7.00 from holding Sinomach Automobile Co or generate 1.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Wuhan Yangtze Communication vs. Sinomach Automobile Co
Performance |
Timeline |
Wuhan Yangtze Commun |
Sinomach Automobile |
Wuhan Yangtze and Sinomach Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wuhan Yangtze and Sinomach Automobile
The main advantage of trading using opposite Wuhan Yangtze and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.Wuhan Yangtze vs. Eastern Air Logistics | Wuhan Yangtze vs. Hengli Industrial Development | Wuhan Yangtze vs. Anhui Gujing Distillery | Wuhan Yangtze vs. Qingdao Choho Industrial |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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