Correlation Between Gansu Huangtai and Weichai Heavy
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By analyzing existing cross correlation between Gansu Huangtai Wine marketing and Weichai Heavy Machinery, you can compare the effects of market volatilities on Gansu Huangtai 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 Gansu Huangtai with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Huangtai and Weichai Heavy.
Diversification Opportunities for Gansu Huangtai and Weichai Heavy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gansu and Weichai is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Huangtai Wine marketing 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 Gansu Huangtai 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 Gansu Huangtai Wine marketing 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 Gansu Huangtai i.e., Gansu Huangtai and Weichai Heavy go up and down completely randomly.
Pair Corralation between Gansu Huangtai and Weichai Heavy
Assuming the 90 days trading horizon Gansu Huangtai is expected to generate 1.02 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Gansu Huangtai Wine marketing is 1.11 times less risky than Weichai Heavy. It trades about 0.15 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,461 in Weichai Heavy Machinery on October 17, 2024 and sell it today you would earn a total of 402.00 from holding Weichai Heavy Machinery or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Huangtai Wine marketing vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Gansu Huangtai Wine |
| Weichai Heavy Machinery |
Gansu Huangtai and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Huangtai and Weichai Heavy
The main advantage of trading using opposite Gansu Huangtai and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Huangtai 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.| Gansu Huangtai vs. Hubei Forbon Technology | Gansu Huangtai vs. Hongrun Construction Group | Gansu Huangtai vs. Allied Machinery Co | Gansu Huangtai vs. Peoples Insurance of |
| Weichai Heavy vs. Road Environment Technology | Weichai Heavy vs. Jinhui Liquor Co | Weichai Heavy vs. Shanghai Broadband Technology | Weichai Heavy vs. Gansu Huangtai Wine marketing |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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