Correlation Between China Securities and WuXi Xinje
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By analyzing existing cross correlation between China Securities 800 and WuXi Xinje Electric, you can compare the effects of market volatilities on China Securities and WuXi Xinje 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 Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and WuXi Xinje.
Diversification Opportunities for China Securities and WuXi Xinje
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and WuXi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric 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 Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of China Securities i.e., China Securities and WuXi Xinje go up and down completely randomly.
Pair Corralation between China Securities and WuXi Xinje
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the WuXi Xinje. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 2.09 times less risky than WuXi Xinje. The index trades about -0.03 of its potential returns per unit of risk. The WuXi Xinje Electric is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,468 in WuXi Xinje Electric on October 15, 2024 and sell it today you would earn a total of 740.00 from holding WuXi Xinje Electric or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. WuXi Xinje Electric
Performance |
| Timeline |
China Securities and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
WuXi Xinje Electric
Pair trading matchups for WuXi Xinje
Pair Trading with China Securities and WuXi Xinje
The main advantage of trading using opposite China Securities and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, WuXi Xinje 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 Xinje will offset losses from the drop in WuXi Xinje's long position.| China Securities vs. Zhongyin Babi Food | China Securities vs. Anji Foodstuff Co | China Securities vs. Anhui Huaheng Biotechnology | China Securities vs. Shandong Sanyuan Biotechnology |
| WuXi Xinje vs. Wuxi Chemical Equipment | WuXi Xinje vs. Guangzhou Haige Communications | WuXi Xinje vs. Shanghai Shibei Hi Tech | WuXi Xinje vs. Liuzhou Chemical Industry |
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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