Correlation Between Qingdao Foods and Wintao Communications
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By analyzing existing cross correlation between Qingdao Foods Co and Wintao Communications Co, you can compare the effects of market volatilities on Qingdao Foods and Wintao Communications 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 Qingdao Foods with a short position of Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Wintao Communications.
Diversification Opportunities for Qingdao Foods and Wintao Communications
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qingdao and Wintao is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Wintao Communications go up and down completely randomly.
Pair Corralation between Qingdao Foods and Wintao Communications
Assuming the 90 days trading horizon Qingdao Foods is expected to generate 5.23 times less return on investment than Wintao Communications. But when comparing it to its historical volatility, Qingdao Foods Co is 1.84 times less risky than Wintao Communications. It trades about 0.07 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,003 in Wintao Communications Co on November 6, 2024 and sell it today you would earn a total of 190.00 from holding Wintao Communications Co or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Wintao Communications Co
Performance |
| Timeline |
| Qingdao Foods |
| Wintao Communications |
Qingdao Foods and Wintao Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Wintao Communications
The main advantage of trading using opposite Qingdao Foods and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.| Qingdao Foods vs. Xilong Chemical Co | Qingdao Foods vs. Jiugui Liquor Co | Qingdao Foods vs. Xinxiang Chemical Fiber | Qingdao Foods vs. Jilin Jlu Communication |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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