Correlation Between Central China and Wuliangye Yibin
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By analyzing existing cross correlation between Central China Land and Wuliangye Yibin Co, you can compare the effects of market volatilities on Central China and Wuliangye Yibin 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 Central China with a short position of Wuliangye Yibin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central China and Wuliangye Yibin.
Diversification Opportunities for Central China and Wuliangye Yibin
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Wuliangye is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Central China Land and Wuliangye Yibin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuliangye Yibin and Central China 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 Central China Land are associated (or correlated) with Wuliangye Yibin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuliangye Yibin has no effect on the direction of Central China i.e., Central China and Wuliangye Yibin go up and down completely randomly.
Pair Corralation between Central China and Wuliangye Yibin
Assuming the 90 days trading horizon Central China Land is expected to generate 1.69 times more return on investment than Wuliangye Yibin. However, Central China is 1.69 times more volatile than Wuliangye Yibin Co. It trades about 0.04 of its potential returns per unit of risk. Wuliangye Yibin Co is currently generating about -0.01 per unit of risk. If you would invest 734.00 in Central China Land on August 30, 2024 and sell it today you would earn a total of 381.00 from holding Central China Land or generate 51.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central China Land vs. Wuliangye Yibin Co
Performance |
| Timeline |
| Central China Land |
| Wuliangye Yibin |
Central China and Wuliangye Yibin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central China and Wuliangye Yibin
The main advantage of trading using opposite Central China and Wuliangye Yibin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central China position performs unexpectedly, Wuliangye Yibin 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 Wuliangye Yibin will offset losses from the drop in Wuliangye Yibin's long position.| Central China vs. Industrial and Commercial | Central China vs. Agricultural Bank of | Central China vs. China Construction Bank | Central China vs. Bank of China |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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