Correlation Between Wuxi Chemical and Hunan Airbluer
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Hunan Airbluer Environmental, you can compare the effects of market volatilities on Wuxi Chemical and Hunan Airbluer 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 Hunan Airbluer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Hunan Airbluer.
Diversification Opportunities for Wuxi Chemical and Hunan Airbluer
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuxi and Hunan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Hunan Airbluer Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Airbluer Envir 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 Hunan Airbluer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Airbluer Envir has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Hunan Airbluer go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Hunan Airbluer
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to under-perform the Hunan Airbluer. But the stock apears to be less risky and, when comparing its historical volatility, Wuxi Chemical Equipment is 1.43 times less risky than Hunan Airbluer. The stock trades about -0.22 of its potential returns per unit of risk. The Hunan Airbluer Environmental is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,730 in Hunan Airbluer Environmental on October 16, 2024 and sell it today you would earn a total of 348.00 from holding Hunan Airbluer Environmental or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Hunan Airbluer Environmental
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Hunan Airbluer Envir |
Wuxi Chemical and Hunan Airbluer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Hunan Airbluer
The main advantage of trading using opposite Wuxi Chemical and Hunan Airbluer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Hunan Airbluer 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 Hunan Airbluer will offset losses from the drop in Hunan Airbluer's long position.| Wuxi Chemical vs. China Sports Industry | Wuxi Chemical vs. Guosheng Financial Holding | Wuxi Chemical vs. Shenzhen AV Display Co | Wuxi Chemical vs. Fibocom Wireless |
| Hunan Airbluer vs. Shenzhen MYS Environmental | Hunan Airbluer vs. AVIC Fund Management | Hunan Airbluer vs. Rongan Property Co | Hunan Airbluer vs. Haoxiangni Jujube 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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