Correlation Between Wuhan Yangtze and CSSC Offshore
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By analyzing existing cross correlation between Wuhan Yangtze Communication and CSSC Offshore Marine, you can compare the effects of market volatilities on Wuhan Yangtze and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and CSSC Offshore.
Diversification Opportunities for Wuhan Yangtze and CSSC Offshore
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wuhan and CSSC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and CSSC Offshore go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and CSSC Offshore
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.44 times more return on investment than CSSC Offshore. However, Wuhan Yangtze is 1.44 times more volatile than CSSC Offshore Marine. It trades about 0.04 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.02 per unit of risk. If you would invest 1,609 in Wuhan Yangtze Communication on October 4, 2024 and sell it today you would earn a total of 617.00 from holding Wuhan Yangtze Communication or generate 38.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wuhan Yangtze Communication vs. CSSC Offshore Marine
Performance |
Timeline |
Wuhan Yangtze Commun |
CSSC Offshore Marine |
Wuhan Yangtze and CSSC Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wuhan Yangtze and CSSC Offshore
The main advantage of trading using opposite Wuhan Yangtze and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.Wuhan Yangtze vs. Hubei Xingfa Chemicals | Wuhan Yangtze vs. StarPower Semiconductor | Wuhan Yangtze vs. Qingdao Choho Industrial | Wuhan Yangtze vs. Pengxin International Mining |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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