Correlation Between Wuxi Chemical and Chongqing Sulian
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Chongqing Sulian Plastic, you can compare the effects of market volatilities on Wuxi Chemical and Chongqing Sulian 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 Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Chongqing Sulian.
Diversification Opportunities for Wuxi Chemical and Chongqing Sulian
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wuxi and Chongqing is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic 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 Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Chongqing Sulian go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Chongqing Sulian
Assuming the 90 days trading horizon Wuxi Chemical is expected to generate 5.4 times less return on investment than Chongqing Sulian. But when comparing it to its historical volatility, Wuxi Chemical Equipment is 3.41 times less risky than Chongqing Sulian. It trades about 0.1 of its potential returns per unit of risk. Chongqing Sulian Plastic is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,490 in Chongqing Sulian Plastic on November 3, 2024 and sell it today you would earn a total of 392.00 from holding Chongqing Sulian Plastic or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Chongqing Sulian Plastic
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Chongqing Sulian Plastic |
Wuxi Chemical and Chongqing Sulian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Chongqing Sulian
The main advantage of trading using opposite Wuxi Chemical and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Chongqing Sulian 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 Chongqing Sulian will offset losses from the drop in Chongqing Sulian's long position.| Wuxi Chemical vs. Hengkang Medical Group | Wuxi Chemical vs. China Everbright Bank | Wuxi Chemical vs. Ningbo Tech Bank Co | Wuxi Chemical vs. Double Medical Technology |
| Chongqing Sulian vs. Jiaozuo Wanfang Aluminum | Chongqing Sulian vs. Cansino Biologics | Chongqing Sulian vs. Zhejiang Yongjin Metal | Chongqing Sulian vs. Wonders Information |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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