Correlation Between Weichai Heavy and Panda Dairy
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By analyzing existing cross correlation between Weichai Heavy Machinery and Panda Dairy Corp, you can compare the effects of market volatilities on Weichai Heavy and Panda Dairy 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 Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Panda Dairy.
Diversification Opportunities for Weichai Heavy and Panda Dairy
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Weichai and Panda is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp 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 Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Panda Dairy go up and down completely randomly.
Pair Corralation between Weichai Heavy and Panda Dairy
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.71 times more return on investment than Panda Dairy. However, Weichai Heavy is 1.71 times more volatile than Panda Dairy Corp. It trades about 0.15 of its potential returns per unit of risk. Panda Dairy Corp is currently generating about -0.22 per unit of risk. If you would invest 1,748 in Weichai Heavy Machinery on November 2, 2024 and sell it today you would earn a total of 246.00 from holding Weichai Heavy Machinery or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Panda Dairy Corp
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Panda Dairy Corp |
Weichai Heavy and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Panda Dairy
The main advantage of trading using opposite Weichai Heavy and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy's long position.| Weichai Heavy vs. Zhengzhou Coal Mining | Weichai Heavy vs. Miracll Chemicals Co | Weichai Heavy vs. Guocheng Mining Co | Weichai Heavy vs. Fujian Oriental Silver |
| Panda Dairy vs. Qingdao Haier Biomedical | Panda Dairy vs. Ligao Foods CoLtd | Panda Dairy vs. Zhonghong Pulin Medical | Panda Dairy vs. Touchstone International Medical |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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