Correlation Between Maoming Petro and Weichai Heavy
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Weichai Heavy Machinery, you can compare the effects of market volatilities on Maoming Petro and Weichai Heavy 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 Maoming Petro with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Weichai Heavy.
Diversification Opportunities for Maoming Petro and Weichai Heavy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maoming and Weichai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Maoming Petro i.e., Maoming Petro and Weichai Heavy go up and down completely randomly.
Pair Corralation between Maoming Petro and Weichai Heavy
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to under-perform the Weichai Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Maoming Petro Chemical Shihua is 2.19 times less risky than Weichai Heavy. The stock trades about -0.32 of its potential returns per unit of risk. The Weichai Heavy Machinery is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,233 in Weichai Heavy Machinery on October 12, 2024 and sell it today you would earn a total of 593.00 from holding Weichai Heavy Machinery or generate 48.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Maoming Petro Chemical |
| Weichai Heavy Machinery |
Maoming Petro and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Weichai Heavy
The main advantage of trading using opposite Maoming Petro and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Maoming Petro vs. Tongxing Environmental Protection | Maoming Petro vs. Innovative Medical Management | Maoming Petro vs. Xiangyu Medical Co | Maoming Petro vs. Shandong Iron and |
| Weichai Heavy vs. Lonkey Industrial Co | Weichai Heavy vs. Universal Scientific Industrial | Weichai Heavy vs. Sportsoul Co Ltd | Weichai Heavy vs. Tibet Huayu Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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