Correlation Between China Securities and WuXi AppTec
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By analyzing existing cross correlation between China Securities 800 and WuXi AppTec Co, you can compare the effects of market volatilities on China Securities and WuXi AppTec 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 China Securities with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and WuXi AppTec.
Diversification Opportunities for China Securities and WuXi AppTec
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and WuXi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and China Securities 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 China Securities 800 are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of China Securities i.e., China Securities and WuXi AppTec go up and down completely randomly.
Pair Corralation between China Securities and WuXi AppTec
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the WuXi AppTec. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.44 times less risky than WuXi AppTec. The index trades about -0.3 of its potential returns per unit of risk. The WuXi AppTec Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 5,621 in WuXi AppTec Co on October 15, 2024 and sell it today you would lose (285.00) from holding WuXi AppTec Co or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. WuXi AppTec Co
Performance |
| Timeline |
China Securities and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
WuXi AppTec Co
Pair trading matchups for WuXi AppTec
Pair Trading with China Securities and WuXi AppTec
The main advantage of trading using opposite China Securities and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| China Securities vs. Sunwave Communications Co | China Securities vs. Dongfeng Automobile Co | China Securities vs. Nanjing Vishee Medical | China Securities vs. Haima Automobile Group |
| WuXi AppTec vs. Integrated Electronic Systems | WuXi AppTec vs. Ciwen Media Co | WuXi AppTec vs. Threes Company Media | WuXi AppTec vs. Epoxy Base Electronic |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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