Correlation Between Weichai Heavy and Hainan Haiqi
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By analyzing existing cross correlation between Weichai Heavy Machinery and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Weichai Heavy and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Hainan Haiqi.
Diversification Opportunities for Weichai Heavy and Hainan Haiqi
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weichai and Hainan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Weichai Heavy and Hainan Haiqi
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.35 times more return on investment than Hainan Haiqi. However, Weichai Heavy is 1.35 times more volatile than Hainan Haiqi Transportation. It trades about 0.18 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about 0.15 per unit of risk. If you would invest 859.00 in Weichai Heavy Machinery on August 29, 2024 and sell it today you would earn a total of 390.00 from holding Weichai Heavy Machinery or generate 45.4% 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. Hainan Haiqi Transportation
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Hainan Haiqi Transpo |
Weichai Heavy and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Hainan Haiqi
The main advantage of trading using opposite Weichai Heavy and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi'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 |
| Hainan Haiqi vs. Cambricon Technologies Corp | Hainan Haiqi vs. Loongson Technology Corp | Hainan Haiqi vs. Chongqing Road Bridge | Hainan Haiqi 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 Stocks Directory module to find actively traded stocks across global markets.
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