Correlation Between Wuxi Chemical and Kangyue Technology
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Kangyue Technology Co, you can compare the effects of market volatilities on Wuxi Chemical and Kangyue Technology 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 Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Kangyue Technology.
Diversification Opportunities for Wuxi Chemical and Kangyue Technology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuxi and Kangyue is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Kangyue Technology go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Kangyue Technology
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 0.52 times more return on investment than Kangyue Technology. However, Wuxi Chemical Equipment is 1.91 times less risky than Kangyue Technology. It trades about -0.24 of its potential returns per unit of risk. Kangyue Technology Co is currently generating about -0.47 per unit of risk. If you would invest 3,603 in Wuxi Chemical Equipment on October 9, 2024 and sell it today you would lose (329.00) from holding Wuxi Chemical Equipment or give up 9.13% 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. Kangyue Technology Co
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Kangyue Technology |
Wuxi Chemical and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Kangyue Technology
The main advantage of trading using opposite Wuxi Chemical and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Kangyue Technology 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.| Wuxi Chemical vs. Southern PublishingMedia Co | Wuxi Chemical vs. Xinjiang Baodi Mining | Wuxi Chemical vs. Jinhui Mining Co | Wuxi Chemical vs. Chinese Universe Publishing |
| Kangyue Technology vs. Shenzhen Kexin Communication | Kangyue Technology vs. Bank of Communications | Kangyue Technology vs. Juneyao Airlines | Kangyue Technology vs. Guangzhou Haige Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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