Correlation Between Wuxi Chemical and Chengdu Xingrong
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Wuxi Chemical and Chengdu Xingrong 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 Wuxi Chemical with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Chengdu Xingrong.
Diversification Opportunities for Wuxi Chemical and Chengdu Xingrong
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuxi and Chengdu is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Wuxi 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 Wuxi Chemical Equipment are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Chengdu Xingrong
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 1.22 times more return on investment than Chengdu Xingrong. However, Wuxi Chemical is 1.22 times more volatile than Chengdu Xingrong Investment. It trades about 0.15 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.08 per unit of risk. If you would invest 3,413 in Wuxi Chemical Equipment on September 4, 2024 and sell it today you would earn a total of 235.00 from holding Wuxi Chemical Equipment or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Chengdu Xingrong Inv |
Wuxi Chemical and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Chengdu Xingrong
The main advantage of trading using opposite Wuxi Chemical and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Wuxi Chemical vs. Chengdu Kanghua Biological | Wuxi Chemical vs. Beijing Wantai Biological | Wuxi Chemical vs. Suzhou Novoprotein Scientific | Wuxi Chemical vs. Aluminum Corp of |
| Chengdu Xingrong vs. Wuxi Chemical Equipment | Chengdu Xingrong vs. Guangzhou Haige Communications | Chengdu Xingrong vs. CICT Mobile Communication | Chengdu Xingrong vs. Shenyang Chemical Industry |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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