Correlation Between Changchun and Wangneng Environment
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By analyzing existing cross correlation between Changchun UP Optotech and Wangneng Environment Co, you can compare the effects of market volatilities on Changchun and Wangneng Environment 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 Changchun with a short position of Wangneng Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Wangneng Environment.
Diversification Opportunities for Changchun and Wangneng Environment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Wangneng is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Wangneng Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wangneng Environment and Changchun 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 Changchun UP Optotech are associated (or correlated) with Wangneng Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wangneng Environment has no effect on the direction of Changchun i.e., Changchun and Wangneng Environment go up and down completely randomly.
Pair Corralation between Changchun and Wangneng Environment
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 2.39 times more return on investment than Wangneng Environment. However, Changchun is 2.39 times more volatile than Wangneng Environment Co. It trades about 0.05 of its potential returns per unit of risk. Wangneng Environment Co is currently generating about -0.01 per unit of risk. If you would invest 2,347 in Changchun UP Optotech on August 31, 2024 and sell it today you would earn a total of 1,734 from holding Changchun UP Optotech or generate 73.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Wangneng Environment Co
Performance |
| Timeline |
| Changchun UP Optotech |
| Wangneng Environment |
Changchun and Wangneng Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Wangneng Environment
The main advantage of trading using opposite Changchun and Wangneng Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Wangneng Environment 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 Wangneng Environment will offset losses from the drop in Wangneng Environment's long position.| Changchun vs. Cultural Investment Holdings | Changchun vs. Gome Telecom Equipment | Changchun vs. Bus Online Co | Changchun vs. Holitech Technology Co |
| Wangneng Environment vs. China State Construction | Wangneng Environment vs. China Merchants Shekou | Wangneng Environment vs. Huafa Industrial Co | Wangneng Environment vs. China International Capital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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