Correlation Between Weichai Heavy and Sichuan Fulin
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By analyzing existing cross correlation between Weichai Heavy Machinery and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Weichai Heavy and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Sichuan Fulin.
Diversification Opportunities for Weichai Heavy and Sichuan Fulin
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weichai and Sichuan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Weichai Heavy and Sichuan Fulin
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 2.31 times more return on investment than Sichuan Fulin. However, Weichai Heavy is 2.31 times more volatile than Sichuan Fulin Transportation. It trades about 0.12 of its potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.21 per unit of risk. If you would invest 1,118 in Weichai Heavy Machinery on August 29, 2024 and sell it today you would earn a total of 131.00 from holding Weichai Heavy Machinery or generate 11.72% 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. Sichuan Fulin Transportation
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Sichuan Fulin Transp |
Weichai Heavy and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Sichuan Fulin
The main advantage of trading using opposite Weichai Heavy and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin'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 |
| Sichuan Fulin vs. Cambricon Technologies Corp | Sichuan Fulin vs. Loongson Technology Corp | Sichuan Fulin vs. Chongqing Road Bridge | Sichuan Fulin vs. Shenzhen Fortune Trend |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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