Correlation Between Xiangyang Automobile and Wuhan Yangtze
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Xiangyang Automobile 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 Xiangyang Automobile with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Wuhan Yangtze.
Diversification Opportunities for Xiangyang Automobile and Wuhan Yangtze
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Wuhan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing 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 Xiangyang Automobile 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 Xiangyang Automobile Bearing 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 Xiangyang Automobile i.e., Xiangyang Automobile and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Wuhan Yangtze
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to under-perform the Wuhan Yangtze. But the stock apears to be less risky and, when comparing its historical volatility, Xiangyang Automobile Bearing is 1.7 times less risky than Wuhan Yangtze. The stock trades about -0.01 of its potential returns per unit of risk. The Wuhan Yangtze Communication is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Wuhan Yangtze Communication on August 28, 2024 and sell it today you would earn a total of 622.00 from holding Wuhan Yangtze Communication or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Xiangyang Automobile |
| Wuhan Yangtze Commun |
Xiangyang Automobile and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Wuhan Yangtze
The main advantage of trading using opposite Xiangyang Automobile and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile 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.| Xiangyang Automobile vs. Loongson Technology Corp | Xiangyang Automobile vs. Chongqing Road Bridge | Xiangyang Automobile vs. Shenzhen Fortune Trend | Xiangyang Automobile vs. Wuhan Xianglong Power |
| Wuhan Yangtze vs. Yankershop Food Co | Wuhan Yangtze vs. Youyou Foods Co | Wuhan Yangtze vs. Great Sun Foods Co | Wuhan Yangtze vs. Harbin Air Conditioning |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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