Correlation Between Weichai Heavy and Changchun High
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By analyzing existing cross correlation between Weichai Heavy Machinery and Changchun High New, you can compare the effects of market volatilities on Weichai Heavy and Changchun High 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 Changchun High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Changchun High.
Diversification Opportunities for Weichai Heavy and Changchun High
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Weichai and Changchun is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Changchun High New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun High New 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 Changchun High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun High New has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Changchun High go up and down completely randomly.
Pair Corralation between Weichai Heavy and Changchun High
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 5.31 times more return on investment than Changchun High. However, Weichai Heavy is 5.31 times more volatile than Changchun High New. It trades about 0.4 of its potential returns per unit of risk. Changchun High New is currently generating about -0.59 per unit of risk. If you would invest 1,216 in Weichai Heavy Machinery on October 14, 2024 and sell it today you would earn a total of 644.00 from holding Weichai Heavy Machinery or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Changchun High New
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Changchun High New |
Weichai Heavy and Changchun High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Changchun High
The main advantage of trading using opposite Weichai Heavy and Changchun High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Changchun High 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 Changchun High will offset losses from the drop in Changchun High's long position.| Weichai Heavy vs. Xiamen Bank Co | Weichai Heavy vs. Shanghai Phichem Material | Weichai Heavy vs. Postal Savings Bank | Weichai Heavy vs. Western Metal Materials |
| Changchun High vs. Tieling Newcity Investment | Changchun High vs. Zhongrun Resources Investment | Changchun High vs. Do Fluoride Chemicals Co | Changchun High vs. Weichai Heavy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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