Correlation Between Weichai Heavy and Guangzhou Jointas
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By analyzing existing cross correlation between Weichai Heavy Machinery and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Weichai Heavy and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Guangzhou Jointas.
Diversification Opportunities for Weichai Heavy and Guangzhou Jointas
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weichai and Guangzhou is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Weichai Heavy and Guangzhou Jointas
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.23 times more return on investment than Guangzhou Jointas. However, Weichai Heavy is 1.23 times more volatile than Guangzhou Jointas Chemical. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about -0.04 per unit of risk. If you would invest 973.00 in Weichai Heavy Machinery on October 26, 2024 and sell it today you would earn a total of 1,173 from holding Weichai Heavy Machinery or generate 120.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Guangzhou Jointas |
Weichai Heavy and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Guangzhou Jointas
The main advantage of trading using opposite Weichai Heavy and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.| Weichai Heavy vs. Ming Yang Smart | Weichai Heavy vs. 159681 | Weichai Heavy vs. 159005 | Weichai Heavy vs. Loctek Ergonomic Technology |
| Guangzhou Jointas vs. Chengdu Spaceon Electronics | Guangzhou Jointas vs. Bus Online Co | Guangzhou Jointas vs. China Asset Management | Guangzhou Jointas vs. Jilin OLED Material |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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