Correlation Between Weichai Heavy and Maoming Petro
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By analyzing existing cross correlation between Weichai Heavy Machinery and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Weichai Heavy and Maoming Petro 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 Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Maoming Petro.
Diversification Opportunities for Weichai Heavy and Maoming Petro
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Weichai and Maoming is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical 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 Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Maoming Petro go up and down completely randomly.
Pair Corralation between Weichai Heavy and Maoming Petro
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 2.19 times more return on investment than Maoming Petro. However, Weichai Heavy is 2.19 times more volatile than Maoming Petro Chemical Shihua. It trades about 0.36 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.32 per unit of risk. If you would invest 1,233 in Weichai Heavy Machinery on October 12, 2024 and sell it today you would earn a total of 593.00 from holding Weichai Heavy Machinery or generate 48.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Maoming Petro Chemical |
Weichai Heavy and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Maoming Petro
The main advantage of trading using opposite Weichai Heavy and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Weichai Heavy vs. Lonkey Industrial Co | Weichai Heavy vs. Universal Scientific Industrial | Weichai Heavy vs. Sportsoul Co Ltd | Weichai Heavy vs. Tibet Huayu Mining |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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