Correlation Between Xilong Chemical and Wuxi Chemical
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By analyzing existing cross correlation between Xilong Chemical Co and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Xilong Chemical and Wuxi Chemical 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 Xilong Chemical with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Wuxi Chemical.
Diversification Opportunities for Xilong Chemical and Wuxi Chemical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xilong and Wuxi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Xilong 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 Xilong Chemical Co are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Xilong Chemical and Wuxi Chemical
Assuming the 90 days trading horizon Xilong Chemical Co is expected to under-perform the Wuxi Chemical. In addition to that, Xilong Chemical is 1.23 times more volatile than Wuxi Chemical Equipment. It trades about 0.0 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about 0.04 per unit of volatility. If you would invest 2,835 in Wuxi Chemical Equipment on October 18, 2024 and sell it today you would earn a total of 641.00 from holding Wuxi Chemical Equipment or generate 22.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Xilong Chemical |
| Wuxi Chemical Equipment |
Xilong Chemical and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Wuxi Chemical
The main advantage of trading using opposite Xilong Chemical and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Xilong Chemical vs. Beijing Kaiwen Education | Xilong Chemical vs. Xinhua Winshare Publishing | Xilong Chemical vs. Duzhe Publishing Media | Xilong Chemical vs. Hangzhou Pinming Software |
| Wuxi Chemical vs. Linewell Software Co | Wuxi Chemical vs. Digiwin Software Co | Wuxi Chemical vs. Innovative Medical Management | Wuxi Chemical vs. Eyebright Medical Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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