Correlation Between Sichuan Fulin and Weichai Heavy
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Weichai Heavy Machinery, you can compare the effects of market volatilities on Sichuan Fulin and Weichai Heavy 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 Sichuan Fulin with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Weichai Heavy.
Diversification Opportunities for Sichuan Fulin and Weichai Heavy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Weichai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Weichai Heavy go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Weichai Heavy
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 1.15 times less return on investment than Weichai Heavy. In addition to that, Sichuan Fulin is 1.06 times more volatile than Weichai Heavy Machinery. It trades about 0.02 of its total potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.03 per unit of volatility. If you would invest 1,007 in Weichai Heavy Machinery on August 25, 2024 and sell it today you would earn a total of 177.00 from holding Weichai Heavy Machinery or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Weichai Heavy Machinery |
Sichuan Fulin and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Weichai Heavy
The main advantage of trading using opposite Sichuan Fulin and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Sichuan Fulin vs. Jonjee Hi tech Industrial | Sichuan Fulin vs. ChengDu Hi Tech Development | Sichuan Fulin vs. Iat Automobile Technology | Sichuan Fulin vs. Guangzhou Automobile Group |
| Weichai Heavy vs. Tongyu Communication | Weichai Heavy vs. FSPG Hi Tech Co | Weichai Heavy vs. HaiXin Foods Co | Weichai Heavy vs. Suzhou Weizhixiang Food |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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