Correlation Between Wuliangye Yibin and China Union
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By analyzing existing cross correlation between Wuliangye Yibin Co and China Union Holdings, you can compare the effects of market volatilities on Wuliangye Yibin and China Union 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 Wuliangye Yibin with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuliangye Yibin and China Union.
Diversification Opportunities for Wuliangye Yibin and China Union
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuliangye and China is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wuliangye Yibin Co and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Wuliangye Yibin 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 Wuliangye Yibin Co are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Wuliangye Yibin i.e., Wuliangye Yibin and China Union go up and down completely randomly.
Pair Corralation between Wuliangye Yibin and China Union
Assuming the 90 days trading horizon Wuliangye Yibin Co is expected to under-perform the China Union. But the stock apears to be less risky and, when comparing its historical volatility, Wuliangye Yibin Co is 2.0 times less risky than China Union. The stock trades about -0.3 of its potential returns per unit of risk. The China Union Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 416.00 in China Union Holdings on October 28, 2024 and sell it today you would lose (16.00) from holding China Union Holdings or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuliangye Yibin Co vs. China Union Holdings
Performance |
| Timeline |
| Wuliangye Yibin |
| China Union Holdings |
Wuliangye Yibin and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuliangye Yibin and China Union
The main advantage of trading using opposite Wuliangye Yibin and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuliangye Yibin position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Wuliangye Yibin vs. Zotye Automobile Co | Wuliangye Yibin vs. Heren Health Co | Wuliangye Yibin vs. Ningbo Fangzheng Automobile | Wuliangye Yibin vs. Sinomach Automobile Co |
| China Union vs. Zhejiang Yinlun Machinery | China Union vs. Shenzhen Zhongzhuang Construction | China Union vs. Suzhou Xingye Material | China Union vs. Guangzhou KDT Machinery |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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