Correlation Between Weichai Heavy and Gansu Huangtai
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By analyzing existing cross correlation between Weichai Heavy Machinery and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Weichai Heavy and Gansu Huangtai 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 Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Gansu Huangtai.
Diversification Opportunities for Weichai Heavy and Gansu Huangtai
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weichai and Gansu is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine 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 Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Weichai Heavy and Gansu Huangtai
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 0.91 times more return on investment than Gansu Huangtai. However, Weichai Heavy Machinery is 1.1 times less risky than Gansu Huangtai. It trades about 0.06 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.0 per unit of risk. If you would invest 973.00 in Weichai Heavy Machinery on October 14, 2024 and sell it today you would earn a total of 887.00 from holding Weichai Heavy Machinery or generate 91.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Gansu Huangtai Wine |
Weichai Heavy and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Gansu Huangtai
The main advantage of trading using opposite Weichai Heavy and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| Weichai Heavy vs. Hangzhou Guotai Environmental | Weichai Heavy vs. Tongyu Communication | Weichai Heavy vs. Beijing Kingsoft Office | Weichai Heavy vs. Porton Fine Chemicals |
| Gansu Huangtai vs. Weichai Heavy Machinery | Gansu Huangtai vs. Sinomach General Machinery | Gansu Huangtai vs. Anhui Huilong Agricultural | Gansu Huangtai vs. Offcn Education Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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