Correlation Between Wuhan Yangtze and Zhejiang Xiantong
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Zhejiang Xiantong RubberPlastic, you can compare the effects of market volatilities on Wuhan Yangtze and Zhejiang Xiantong 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 Zhejiang Xiantong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Zhejiang Xiantong.
Diversification Opportunities for Wuhan Yangtze and Zhejiang Xiantong
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuhan and Zhejiang is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Zhejiang Xiantong RubberPlasti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Xiantong 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 Zhejiang Xiantong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Xiantong has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Zhejiang Xiantong go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Zhejiang Xiantong
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Zhejiang Xiantong. In addition to that, Wuhan Yangtze is 2.1 times more volatile than Zhejiang Xiantong RubberPlastic. It trades about -0.35 of its total potential returns per unit of risk. Zhejiang Xiantong RubberPlastic is currently generating about -0.22 per unit of volatility. If you would invest 1,441 in Zhejiang Xiantong RubberPlastic on October 8, 2024 and sell it today you would lose (116.00) from holding Zhejiang Xiantong RubberPlastic or give up 8.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wuhan Yangtze Communication vs. Zhejiang Xiantong RubberPlasti
Performance |
Timeline |
Wuhan Yangtze Commun |
Zhejiang Xiantong |
Wuhan Yangtze and Zhejiang Xiantong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wuhan Yangtze and Zhejiang Xiantong
The main advantage of trading using opposite Wuhan Yangtze and Zhejiang Xiantong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Zhejiang Xiantong 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 Zhejiang Xiantong will offset losses from the drop in Zhejiang Xiantong's long position.Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. NAURA Technology Group | Wuhan Yangtze vs. Zhejiang Orient Gene | Wuhan Yangtze vs. APT Medical |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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