Correlation Between Weichai Heavy and Ningxia Younglight
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By analyzing existing cross correlation between Weichai Heavy Machinery and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Weichai Heavy and Ningxia Younglight 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 Weichai Heavy with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Ningxia Younglight.
Diversification Opportunities for Weichai Heavy and Ningxia Younglight
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weichai and Ningxia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Weichai Heavy 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 Weichai Heavy Machinery are associated (or correlated) with Ningxia Younglight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Younglight has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Weichai Heavy and Ningxia Younglight
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 0.97 times more return on investment than Ningxia Younglight. However, Weichai Heavy Machinery is 1.03 times less risky than Ningxia Younglight. It trades about 0.06 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about 0.0 per unit of risk. If you would invest 973.00 in Weichai Heavy Machinery on October 16, 2024 and sell it today you would earn a total of 890.00 from holding Weichai Heavy Machinery or generate 91.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Ningxia Younglight |
Weichai Heavy and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Ningxia Younglight
The main advantage of trading using opposite Weichai Heavy and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Ningxia Younglight 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 Ningxia Younglight will offset losses from the drop in Ningxia Younglight's long position.| Weichai Heavy vs. Road Environment Technology | Weichai Heavy vs. Jinhui Liquor Co | Weichai Heavy vs. Shanghai Broadband Technology | Weichai Heavy vs. Gansu Huangtai Wine marketing |
| Ningxia Younglight vs. BTG Hotels Group | Ningxia Younglight vs. Tieling Newcity Investment | Ningxia Younglight vs. Weichai Heavy Machinery | Ningxia Younglight vs. Gifore Agricultural 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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