Correlation Between Wuxi Chemical and Sportsoul
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Sportsoul Co Ltd, you can compare the effects of market volatilities on Wuxi Chemical and Sportsoul 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 Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Sportsoul.
Diversification Opportunities for Wuxi Chemical and Sportsoul
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuxi and Sportsoul is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul 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 Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Sportsoul go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Sportsoul
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 0.52 times more return on investment than Sportsoul. However, Wuxi Chemical Equipment is 1.92 times less risky than Sportsoul. It trades about -0.13 of its potential returns per unit of risk. Sportsoul Co Ltd is currently generating about -0.25 per unit of risk. If you would invest 3,607 in Wuxi Chemical Equipment on October 11, 2024 and sell it today you would lose (207.00) from holding Wuxi Chemical Equipment or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Sportsoul Co Ltd
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Sportsoul |
Wuxi Chemical and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Sportsoul
The main advantage of trading using opposite Wuxi Chemical and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| Wuxi Chemical vs. Beijing HuaYuanYiTong Thermal | Wuxi Chemical vs. Shanghai Yanpu Metal | Wuxi Chemical vs. Guangzhou Ruoyuchen Information | Wuxi Chemical vs. Guocheng Mining Co |
| Sportsoul vs. Zhongzhu Medical Holdings | Sportsoul vs. Shenzhen Glory Medical | Sportsoul vs. Hengkang Medical Group | Sportsoul vs. Linewell Software 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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