Correlation Between Wuxi Chemical and Shenzhen MYS
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Wuxi Chemical and Shenzhen MYS 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 Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Shenzhen MYS.
Diversification Opportunities for Wuxi Chemical and Shenzhen MYS
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuxi and Shenzhen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ 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 Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Shenzhen MYS
Assuming the 90 days trading horizon Wuxi Chemical is expected to generate 2.51 times less return on investment than Shenzhen MYS. But when comparing it to its historical volatility, Wuxi Chemical Equipment is 1.78 times less risky than Shenzhen MYS. It trades about 0.18 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Shenzhen MYS Environmental on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Shenzhen MYS Environmental or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Shenzhen MYS Environmental
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Shenzhen MYS Environ |
Wuxi Chemical and Shenzhen MYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Shenzhen MYS
The main advantage of trading using opposite Wuxi Chemical and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Shenzhen MYS 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 Shenzhen MYS will offset losses from the drop in Shenzhen MYS's long position.| Wuxi Chemical vs. New China Life | Wuxi Chemical vs. Ming Yang Smart | Wuxi Chemical vs. 159681 | Wuxi Chemical vs. 159005 |
| Shenzhen MYS vs. Zijin Mining Group | Shenzhen MYS vs. Wanhua Chemical Group | Shenzhen MYS vs. Baoshan Iron Steel | Shenzhen MYS vs. Shandong Gold Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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