Correlation Between Xinxiang Chemical and Weichai Heavy
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By analyzing existing cross correlation between Xinxiang Chemical Fiber and Weichai Heavy Machinery, you can compare the effects of market volatilities on Xinxiang Chemical and Weichai Heavy 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 Xinxiang Chemical with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Weichai Heavy.
Diversification Opportunities for Xinxiang Chemical and Weichai Heavy
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xinxiang and Weichai is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Xinxiang Chemical 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 Xinxiang Chemical Fiber are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Weichai Heavy go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Weichai Heavy
Assuming the 90 days trading horizon Xinxiang Chemical is expected to generate 2.61 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Xinxiang Chemical Fiber is 3.63 times less risky than Weichai Heavy. It trades about 0.32 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Weichai Heavy Machinery on November 6, 2024 and sell it today you would earn a total of 358.00 from holding Weichai Heavy Machinery or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinxiang Chemical Fiber vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
| Weichai Heavy Machinery |
Xinxiang Chemical and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Weichai Heavy
The main advantage of trading using opposite Xinxiang Chemical and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Xinxiang Chemical vs. Shanghai V Test Semiconductor | Xinxiang Chemical vs. Huaibei Mining Holdings | Xinxiang Chemical vs. Innovative Medical Management | Xinxiang Chemical vs. Fujian Oriental Silver |
| Weichai Heavy vs. Shanghai Ziyan Foods | Weichai Heavy vs. Huaibei Mining Holdings | Weichai Heavy vs. New Hope Dairy | Weichai Heavy vs. Anji Foodstuff Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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