Correlation Between Weichai Heavy and Qingdao Haier
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By analyzing existing cross correlation between Weichai Heavy Machinery and Qingdao Haier Biomedical, you can compare the effects of market volatilities on Weichai Heavy and Qingdao Haier 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 Qingdao Haier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Heavy and Qingdao Haier.
Diversification Opportunities for Weichai Heavy and Qingdao Haier
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weichai and Qingdao is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Heavy Machinery and Qingdao Haier Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Haier Biomedical 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 Qingdao Haier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Haier Biomedical has no effect on the direction of Weichai Heavy i.e., Weichai Heavy and Qingdao Haier go up and down completely randomly.
Pair Corralation between Weichai Heavy and Qingdao Haier
Assuming the 90 days trading horizon Weichai Heavy Machinery is expected to generate 1.17 times more return on investment than Qingdao Haier. However, Weichai Heavy is 1.17 times more volatile than Qingdao Haier Biomedical. It trades about 0.13 of its potential returns per unit of risk. Qingdao Haier Biomedical is currently generating about 0.02 per unit of risk. If you would invest 839.00 in Weichai Heavy Machinery on October 12, 2024 and sell it today you would earn a total of 987.00 from holding Weichai Heavy Machinery or generate 117.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weichai Heavy Machinery vs. Qingdao Haier Biomedical
Performance |
| Timeline |
| Weichai Heavy Machinery |
| Qingdao Haier Biomedical |
Weichai Heavy and Qingdao Haier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Heavy and Qingdao Haier
The main advantage of trading using opposite Weichai Heavy and Qingdao Haier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Heavy position performs unexpectedly, Qingdao Haier 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 Qingdao Haier will offset losses from the drop in Qingdao Haier's long position.| Weichai Heavy vs. Lonkey Industrial Co | Weichai Heavy vs. Universal Scientific Industrial | Weichai Heavy vs. Sportsoul Co Ltd | Weichai Heavy vs. Tibet Huayu Mining |
| Qingdao Haier vs. Innovative Medical Management | Qingdao Haier vs. Fiberhome Telecommunication Technologies | Qingdao Haier vs. Zhejiang JIULI Hi tech | Qingdao Haier vs. Sichuan Jinshi Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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