Correlation Between Weichai Heavy and Xinjiang Beixin
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By analyzing existing cross correlation between Weichai Heavy Machinery and Xinjiang Beixin RoadBridge, you can compare the effects of market volatilities on Weichai Heavy and Xinjiang Beixin 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 Xinjiang Beixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Xinjiang Beixin.
Diversification Opportunities for Weichai Heavy and Xinjiang Beixin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weichai and Xinjiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Xinjiang Beixin RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Beixin Road 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 Xinjiang Beixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Beixin Road has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Xinjiang Beixin go up and down completely randomly.
Pair Corralation between Weichai Heavy and Xinjiang Beixin
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.13 times more return on investment than Xinjiang Beixin. However, Weichai Heavy is 1.13 times more volatile than Xinjiang Beixin RoadBridge. It trades about 0.03 of its potential returns per unit of risk. Xinjiang Beixin RoadBridge is currently generating about -0.02 per unit of risk. If you would invest 1,007 in Weichai Heavy Machinery on August 25, 2024 and sell it today you would earn a total of 177.00 from holding Weichai Heavy Machinery or generate 17.58% 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. Xinjiang Beixin RoadBridge
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Xinjiang Beixin Road |
Weichai Heavy and Xinjiang Beixin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Xinjiang Beixin
The main advantage of trading using opposite Weichai Heavy and Xinjiang Beixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Xinjiang Beixin 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 Xinjiang Beixin will offset losses from the drop in Xinjiang Beixin's long position.| Weichai Heavy vs. Tongyu Communication | Weichai Heavy vs. FSPG Hi Tech Co | Weichai Heavy vs. HaiXin Foods Co | Weichai Heavy vs. Suzhou Weizhixiang Food |
| Xinjiang Beixin vs. Ming Yang Smart | Xinjiang Beixin vs. 159681 | Xinjiang Beixin vs. 159005 | Xinjiang Beixin vs. Loctek Ergonomic 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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