Correlation Between Wuxi Chemical and Kuang Chi
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Kuang Chi Technologies, you can compare the effects of market volatilities on Wuxi Chemical and Kuang Chi 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 Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Kuang Chi.
Diversification Opportunities for Wuxi Chemical and Kuang Chi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuxi and Kuang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies 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 Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Kuang Chi go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Kuang Chi
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 0.48 times more return on investment than Kuang Chi. However, Wuxi Chemical Equipment is 2.1 times less risky than Kuang Chi. It trades about 0.14 of its potential returns per unit of risk. Kuang Chi Technologies is currently generating about 0.01 per unit of risk. If you would invest 3,413 in Wuxi Chemical Equipment on September 5, 2024 and sell it today you would earn a total of 226.00 from holding Wuxi Chemical Equipment or generate 6.62% 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. Kuang Chi Technologies
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Kuang Chi Technologies |
Wuxi Chemical and Kuang Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Kuang Chi
The main advantage of trading using opposite Wuxi Chemical and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.| Wuxi Chemical vs. Ping An Insurance | Wuxi Chemical vs. Panda Financial Holding | Wuxi Chemical vs. Unisplendour Corp | Wuxi Chemical vs. Shenzhen SDG Information |
| Kuang Chi vs. Cultural Investment Holdings | Kuang Chi vs. Gome Telecom Equipment | Kuang Chi vs. Bus Online Co | Kuang Chi vs. Holitech Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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