Correlation Between Wuxi Chemical and Shandong Sinoglory
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Shandong Sinoglory Health, you can compare the effects of market volatilities on Wuxi Chemical and Shandong Sinoglory 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 Shandong Sinoglory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Shandong Sinoglory.
Diversification Opportunities for Wuxi Chemical and Shandong Sinoglory
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuxi and Shandong is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Shandong Sinoglory Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sinoglory Health 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 Shandong Sinoglory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sinoglory Health has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Shandong Sinoglory go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Shandong Sinoglory
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 1.2 times more return on investment than Shandong Sinoglory. However, Wuxi Chemical is 1.2 times more volatile than Shandong Sinoglory Health. It trades about -0.01 of its potential returns per unit of risk. Shandong Sinoglory Health is currently generating about -0.03 per unit of risk. If you would invest 4,337 in Wuxi Chemical Equipment on October 14, 2024 and sell it today you would lose (987.00) from holding Wuxi Chemical Equipment or give up 22.76% 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. Shandong Sinoglory Health
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Shandong Sinoglory Health |
Wuxi Chemical and Shandong Sinoglory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Shandong Sinoglory
The main advantage of trading using opposite Wuxi Chemical and Shandong Sinoglory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Shandong Sinoglory 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 Shandong Sinoglory will offset losses from the drop in Shandong Sinoglory's long position.| Wuxi Chemical vs. Guangdong Silvere Sci | Wuxi Chemical vs. Uroica Mining Safety | Wuxi Chemical vs. Zhejiang JIULI Hi tech | Wuxi Chemical vs. Xinjiang Baodi Mining |
| Shandong Sinoglory vs. Guangxi Wuzhou Communications | Shandong Sinoglory vs. Jilin Chemical Fibre | Shandong Sinoglory vs. Wuxi Chemical Equipment | Shandong Sinoglory vs. Quectel Wireless Solutions |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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