Correlation Between Zhejiang Qianjiang and Wuliangye Yibin
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Wuliangye Yibin Co, you can compare the effects of market volatilities on Zhejiang Qianjiang and Wuliangye Yibin 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 Zhejiang Qianjiang with a short position of Wuliangye Yibin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Wuliangye Yibin.
Diversification Opportunities for Zhejiang Qianjiang and Wuliangye Yibin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Wuliangye is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle and Wuliangye Yibin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuliangye Yibin and Zhejiang Qianjiang 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 Zhejiang Qianjiang Motorcycle are associated (or correlated) with Wuliangye Yibin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuliangye Yibin has no effect on the direction of Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Wuliangye Yibin go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Wuliangye Yibin
Assuming the 90 days trading horizon Zhejiang Qianjiang is expected to generate 3.01 times less return on investment than Wuliangye Yibin. But when comparing it to its historical volatility, Zhejiang Qianjiang Motorcycle is 1.08 times less risky than Wuliangye Yibin. It trades about 0.04 of its potential returns per unit of risk. Wuliangye Yibin Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,032 in Wuliangye Yibin Co on September 3, 2024 and sell it today you would earn a total of 2,645 from holding Wuliangye Yibin Co or generate 21.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Wuliangye Yibin Co
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Wuliangye Yibin |
Zhejiang Qianjiang and Wuliangye Yibin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Wuliangye Yibin
The main advantage of trading using opposite Zhejiang Qianjiang and Wuliangye Yibin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang position performs unexpectedly, Wuliangye Yibin 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 Wuliangye Yibin will offset losses from the drop in Wuliangye Yibin's long position.| Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. China Mobile Limited | Zhejiang Qianjiang vs. Industrial and Commercial | Zhejiang Qianjiang vs. China Life Insurance |
| Wuliangye Yibin vs. Harvest Fund Management | Wuliangye Yibin vs. CICC Fund Management | Wuliangye Yibin vs. Zhejiang Qianjiang Motorcycle | Wuliangye Yibin vs. Haima Automobile Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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