Correlation Between Weichai Heavy and Sichuan Jinshi
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By analyzing existing cross correlation between Weichai Heavy Machinery and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Weichai Heavy and Sichuan Jinshi 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 Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Sichuan Jinshi.
Diversification Opportunities for Weichai Heavy and Sichuan Jinshi
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weichai and Sichuan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Weichai Heavy and Sichuan Jinshi
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 2.12 times more return on investment than Sichuan Jinshi. However, Weichai Heavy is 2.12 times more volatile than Sichuan Jinshi Technology. It trades about 0.34 of its potential returns per unit of risk. Sichuan Jinshi Technology is currently generating about -0.01 per unit of risk. If you would invest 1,531 in Weichai Heavy Machinery on October 25, 2024 and sell it today you would earn a total of 692.00 from holding Weichai Heavy Machinery or generate 45.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Sichuan Jinshi Technology
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Sichuan Jinshi Technology |
Weichai Heavy and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Sichuan Jinshi
The main advantage of trading using opposite Weichai Heavy and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Sichuan Jinshi 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 Jinshi will offset losses from the drop in Sichuan Jinshi's long position.| Weichai Heavy vs. Kweichow Moutai Co | Weichai Heavy vs. Contemporary Amperex Technology | Weichai Heavy vs. Beijing Roborock Technology | Weichai Heavy vs. BYD Co Ltd |
| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Wanhua Chemical Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Rongsheng Petrochemical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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