Correlation Between Weichai Heavy and Holitech Technology
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By analyzing existing cross correlation between Weichai Heavy Machinery and Holitech Technology Co, you can compare the effects of market volatilities on Weichai Heavy and Holitech Technology 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 Holitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Holitech Technology.
Diversification Opportunities for Weichai Heavy and Holitech Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weichai and Holitech is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology 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 Holitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holitech Technology has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Holitech Technology go up and down completely randomly.
Pair Corralation between Weichai Heavy and Holitech Technology
Assuming the 90 days trading horizon Weichai Heavy is expected to generate 1.2 times less return on investment than Holitech Technology. In addition to that, Weichai Heavy is 1.28 times more volatile than Holitech Technology Co. It trades about 0.1 of its total potential returns per unit of risk. Holitech Technology Co is currently generating about 0.15 per unit of volatility. If you would invest 130.00 in Holitech Technology Co on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Holitech Technology Co or generate 68.46% 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. Holitech Technology Co
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Holitech Technology |
Weichai Heavy and Holitech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Holitech Technology
The main advantage of trading using opposite Weichai Heavy and Holitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Holitech Technology 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 Holitech Technology will offset losses from the drop in Holitech Technology's long position.| Weichai Heavy vs. Cultural Investment Holdings | Weichai Heavy vs. Gome Telecom Equipment | Weichai Heavy vs. Bus Online Co | Weichai Heavy vs. Holitech Technology Co |
| Holitech Technology vs. Cultural Investment Holdings | Holitech Technology vs. Gome Telecom Equipment | Holitech Technology vs. Bus Online Co | Holitech Technology vs. Zotye Automobile Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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