Correlation Between Wuxi Chemical and Cultural Investment
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Cultural Investment Holdings, you can compare the effects of market volatilities on Wuxi Chemical and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Cultural Investment.
Diversification Opportunities for Wuxi Chemical and Cultural Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuxi and Cultural is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Cultural Investment go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Cultural Investment
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 0.93 times more return on investment than Cultural Investment. However, Wuxi Chemical Equipment is 1.08 times less risky than Cultural Investment. It trades about 0.13 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.09 per unit of risk. If you would invest 2,458 in Wuxi Chemical Equipment on September 2, 2024 and sell it today you would earn a total of 1,183 from holding Wuxi Chemical Equipment or generate 48.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Cultural Investment Holdings
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Cultural Investment |
Wuxi Chemical and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Cultural Investment
The main advantage of trading using opposite Wuxi Chemical and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Wuxi Chemical vs. New China Life | Wuxi Chemical vs. Ming Yang Smart | Wuxi Chemical vs. 159681 | Wuxi Chemical vs. 159005 |
| Cultural Investment vs. China Minmetals Rare | Cultural Investment vs. Chengtun Mining Group | Cultural Investment vs. Qinghaihuading Industrial Co | Cultural Investment vs. China Life Insurance |
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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