Correlation Between Wuliangye Yibin and China Longyuan
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By analyzing existing cross correlation between Wuliangye Yibin Co and China Longyuan Power, you can compare the effects of market volatilities on Wuliangye Yibin and China Longyuan 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 Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuliangye Yibin and China Longyuan.
Diversification Opportunities for Wuliangye Yibin and China Longyuan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuliangye and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wuliangye Yibin Co and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power 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 Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Wuliangye Yibin i.e., Wuliangye Yibin and China Longyuan go up and down completely randomly.
Pair Corralation between Wuliangye Yibin and China Longyuan
Assuming the 90 days trading horizon Wuliangye Yibin Co is expected to generate 1.09 times more return on investment than China Longyuan. However, Wuliangye Yibin is 1.09 times more volatile than China Longyuan Power. It trades about 0.0 of its potential returns per unit of risk. China Longyuan Power is currently generating about -0.02 per unit of risk. If you would invest 15,531 in Wuliangye Yibin Co on August 31, 2024 and sell it today you would lose (854.00) from holding Wuliangye Yibin Co or give up 5.5% 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 Longyuan Power
Performance |
| Timeline |
| Wuliangye Yibin |
| China Longyuan Power |
Wuliangye Yibin and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuliangye Yibin and China Longyuan
The main advantage of trading using opposite Wuliangye Yibin and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuliangye Yibin position performs unexpectedly, China Longyuan 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 Longyuan will offset losses from the drop in China Longyuan's long position.| Wuliangye Yibin vs. Success Electronics | Wuliangye Yibin vs. Bomin Electronics Co | Wuliangye Yibin vs. Hangzhou Prevail Optoelectronic | Wuliangye Yibin vs. Jiangyin Jianghua Microelectronics |
| China Longyuan vs. Guosheng Financial Holding | China Longyuan vs. Jinhe Biotechnology Co | China Longyuan vs. Shandong Sino Agri United | China Longyuan 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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