Correlation Between Wuxi Chemical and Hang Xiao
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Hang Xiao Steel, you can compare the effects of market volatilities on Wuxi Chemical and Hang Xiao 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 Hang Xiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Hang Xiao.
Diversification Opportunities for Wuxi Chemical and Hang Xiao
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuxi and Hang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel 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 Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Hang Xiao go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Hang Xiao
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 1.31 times more return on investment than Hang Xiao. However, Wuxi Chemical is 1.31 times more volatile than Hang Xiao Steel. It trades about 0.0 of its potential returns per unit of risk. Hang Xiao Steel is currently generating about -0.05 per unit of risk. If you would invest 4,228 in Wuxi Chemical Equipment on September 3, 2024 and sell it today you would lose (580.00) from holding Wuxi Chemical Equipment or give up 13.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Hang Xiao Steel
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Hang Xiao Steel |
Wuxi Chemical and Hang Xiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Hang Xiao
The main advantage of trading using opposite Wuxi Chemical and Hang Xiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Hang Xiao 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 Hang Xiao will offset losses from the drop in Hang Xiao's long position.| Wuxi Chemical vs. CITIC Guoan Information | Wuxi Chemical vs. Shenzhen SDG Information | Wuxi Chemical vs. Kangxin New Materials | Wuxi Chemical vs. Jinsanjiang Silicon Material |
| Hang Xiao vs. Cultural Investment Holdings | Hang Xiao vs. Gome Telecom Equipment | Hang Xiao vs. Bus Online Co | Hang Xiao 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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