Correlation Between Weichai Heavy and ZJBC Information
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By analyzing existing cross correlation between Weichai Heavy Machinery and ZJBC Information Technology, you can compare the effects of market volatilities on Weichai Heavy and ZJBC Information 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 ZJBC Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and ZJBC Information.
Diversification Opportunities for Weichai Heavy and ZJBC Information
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weichai and ZJBC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and ZJBC Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZJBC Information Tec 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 ZJBC Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZJBC Information Tec has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and ZJBC Information go up and down completely randomly.
Pair Corralation between Weichai Heavy and ZJBC Information
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 0.97 times more return on investment than ZJBC Information. However, Weichai Heavy Machinery is 1.03 times less risky than ZJBC Information. It trades about 0.03 of its potential returns per unit of risk. ZJBC Information Technology is currently generating about 0.02 per unit of risk. If you would invest 990.00 in Weichai Heavy Machinery on August 28, 2024 and sell it today you would earn a total of 259.00 from holding Weichai Heavy Machinery or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. ZJBC Information Technology
Performance |
| Timeline |
| Weichai Heavy Machinery |
| ZJBC Information Tec |
Weichai Heavy and ZJBC Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and ZJBC Information
The main advantage of trading using opposite Weichai Heavy and ZJBC Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, ZJBC Information 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 ZJBC Information will offset losses from the drop in ZJBC Information's long position.| Weichai Heavy vs. China Asset Management | Weichai Heavy vs. Harvest Fund Management | Weichai Heavy vs. JCHX Mining Management | Weichai Heavy vs. AVIC Fund Management |
| ZJBC Information vs. China Petroleum Chemical | ZJBC Information vs. PetroChina Co Ltd | ZJBC Information vs. China State Construction | ZJBC Information vs. China Railway Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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