Correlation Between Guocheng Mining and Wuxi Chemical
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By analyzing existing cross correlation between Guocheng Mining Co and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Guocheng Mining and Wuxi Chemical 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 Guocheng Mining with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Wuxi Chemical.
Diversification Opportunities for Guocheng Mining and Wuxi Chemical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guocheng and Wuxi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Guocheng Mining 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 Guocheng Mining Co are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Guocheng Mining and Wuxi Chemical
Assuming the 90 days trading horizon Guocheng Mining Co is expected to under-perform the Wuxi Chemical. In addition to that, Guocheng Mining is 2.15 times more volatile than Wuxi Chemical Equipment. It trades about -0.21 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about -0.14 per unit of volatility. If you would invest 3,607 in Wuxi Chemical Equipment on October 11, 2024 and sell it today you would lose (221.00) from holding Wuxi Chemical Equipment or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Guocheng Mining |
| Wuxi Chemical Equipment |
Guocheng Mining and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and Wuxi Chemical
The main advantage of trading using opposite Guocheng Mining and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Guocheng Mining vs. Glodon Software Co | Guocheng Mining vs. Bingo Software Co | Guocheng Mining vs. Beijing Baolande Software | Guocheng Mining vs. Zhengzhou Coal Mining |
| Wuxi Chemical vs. Beijing YanDong MicroElectronic | Wuxi Chemical vs. Integrated Electronic Systems | Wuxi Chemical vs. Chengdu Xingrong Investment | Wuxi Chemical vs. Postal Savings Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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