Correlation Between Weichai Heavy and Mengtian Home
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By analyzing existing cross correlation between Weichai Heavy Machinery and Mengtian Home Group, you can compare the effects of market volatilities on Weichai Heavy and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Mengtian Home.
Diversification Opportunities for Weichai Heavy and Mengtian Home
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weichai and Mengtian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Mengtian Home go up and down completely randomly.
Pair Corralation between Weichai Heavy and Mengtian Home
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 2.45 times more return on investment than Mengtian Home. However, Weichai Heavy is 2.45 times more volatile than Mengtian Home Group. It trades about 0.14 of its potential returns per unit of risk. Mengtian Home Group is currently generating about -0.06 per unit of risk. If you would invest 1,907 in Weichai Heavy Machinery on October 28, 2024 and sell it today you would earn a total of 268.00 from holding Weichai Heavy Machinery or generate 14.05% 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. Mengtian Home Group
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Mengtian Home Group |
Weichai Heavy and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Mengtian Home
The main advantage of trading using opposite Weichai Heavy and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Weichai Heavy vs. China Everbright Bank | Weichai Heavy vs. Panda Financial Holding | Weichai Heavy vs. Ningxia Younglight Chemicals | Weichai Heavy vs. Xinxiang Chemical Fiber |
| Mengtian Home vs. Jiangxi Naipu Mining | Mengtian Home vs. Uroica Mining Safety | Mengtian Home vs. CITIC Metal Co | Mengtian Home vs. Tianjin Silvery Dragon |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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