Correlation Between Wuxi Chemical and Guizhou Chanhen
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Wuxi Chemical and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Guizhou Chanhen.
Diversification Opportunities for Wuxi Chemical and Guizhou Chanhen
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuxi and Guizhou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Guizhou Chanhen
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to under-perform the Guizhou Chanhen. But the stock apears to be less risky and, when comparing its historical volatility, Wuxi Chemical Equipment is 1.18 times less risky than Guizhou Chanhen. The stock trades about -0.18 of its potential returns per unit of risk. The Guizhou Chanhen Chemical is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Guizhou Chanhen Chemical on October 14, 2024 and sell it today you would lose (132.00) from holding Guizhou Chanhen Chemical or give up 5.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Guizhou Chanhen Chemical |
Wuxi Chemical and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Guizhou Chanhen
The main advantage of trading using opposite Wuxi Chemical and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Wuxi Chemical vs. Guangdong Silvere Sci | Wuxi Chemical vs. Uroica Mining Safety | Wuxi Chemical vs. Zhejiang JIULI Hi tech | Wuxi Chemical vs. Xinjiang Baodi Mining |
| Guizhou Chanhen vs. Xiamen Goldenhome Co | Guizhou Chanhen vs. China Sports Industry | Guizhou Chanhen vs. Shanghai Shuixing Home | Guizhou Chanhen vs. Oppein Home Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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