Correlation Between Sunwave Communications and Wuliangye Yibin
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By analyzing existing cross correlation between Sunwave Communications Co and Wuliangye Yibin Co, you can compare the effects of market volatilities on Sunwave Communications and Wuliangye Yibin 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 Sunwave Communications with a short position of Wuliangye Yibin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Wuliangye Yibin.
Diversification Opportunities for Sunwave Communications and Wuliangye Yibin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunwave and Wuliangye is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Wuliangye Yibin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuliangye Yibin and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with Wuliangye Yibin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuliangye Yibin has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Wuliangye Yibin go up and down completely randomly.
Pair Corralation between Sunwave Communications and Wuliangye Yibin
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 2.01 times more return on investment than Wuliangye Yibin. However, Sunwave Communications is 2.01 times more volatile than Wuliangye Yibin Co. It trades about 0.23 of its potential returns per unit of risk. Wuliangye Yibin Co is currently generating about -0.04 per unit of risk. If you would invest 544.00 in Sunwave Communications Co on August 30, 2024 and sell it today you would earn a total of 121.00 from holding Sunwave Communications Co or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. Wuliangye Yibin Co
Performance |
| Timeline |
| Sunwave Communications |
| Wuliangye Yibin |
Sunwave Communications and Wuliangye Yibin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Wuliangye Yibin
The main advantage of trading using opposite Sunwave Communications and Wuliangye Yibin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Wuliangye Yibin 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 Wuliangye Yibin will offset losses from the drop in Wuliangye Yibin's long position.The idea behind Sunwave Communications Co and Wuliangye Yibin Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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