Correlation Between Shaanxi Energy and Weichai Heavy
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By analyzing existing cross correlation between Shaanxi Energy Investment and Weichai Heavy Machinery, you can compare the effects of market volatilities on Shaanxi Energy 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 Shaanxi Energy with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Weichai Heavy.
Diversification Opportunities for Shaanxi Energy and Weichai Heavy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shaanxi and Weichai is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment 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 Shaanxi Energy 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 Shaanxi Energy Investment 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 Shaanxi Energy i.e., Shaanxi Energy and Weichai Heavy go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Weichai Heavy
Assuming the 90 days trading horizon Shaanxi Energy Investment is expected to under-perform the Weichai Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Energy Investment is 1.36 times less risky than Weichai Heavy. The stock trades about -0.03 of its potential returns per unit of risk. The Weichai Heavy Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 928.00 in Weichai Heavy Machinery on September 3, 2024 and sell it today you would earn a total of 280.00 from holding Weichai Heavy Machinery or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.86% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Weichai Heavy Machinery |
Shaanxi Energy and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Weichai Heavy
The main advantage of trading using opposite Shaanxi Energy and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy 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.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Gansu Jiu Steel | Shaanxi Energy vs. Ming Yang Smart | Shaanxi Energy vs. Aba Chemicals Corp |
| Weichai Heavy vs. Guangdong Jingyi Metal | Weichai Heavy vs. Shandong Hongchuang Aluminum | Weichai Heavy vs. Jiaozuo Wanfang Aluminum | Weichai Heavy vs. Rising Nonferrous Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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