Correlation Between Xiamen Wanli and Western Superconducting
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By analyzing existing cross correlation between Xiamen Wanli Stone and Western Superconducting Tech, you can compare the effects of market volatilities on Xiamen Wanli and Western Superconducting 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 Xiamen Wanli with a short position of Western Superconducting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Wanli and Western Superconducting.
Diversification Opportunities for Xiamen Wanli and Western Superconducting
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiamen and Western is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Wanli Stone and Western Superconducting Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Superconducting and Xiamen Wanli 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 Xiamen Wanli Stone are associated (or correlated) with Western Superconducting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Superconducting has no effect on the direction of Xiamen Wanli i.e., Xiamen Wanli and Western Superconducting go up and down completely randomly.
Pair Corralation between Xiamen Wanli and Western Superconducting
Assuming the 90 days trading horizon Xiamen Wanli Stone is expected to generate 0.9 times more return on investment than Western Superconducting. However, Xiamen Wanli Stone is 1.11 times less risky than Western Superconducting. It trades about 0.14 of its potential returns per unit of risk. Western Superconducting Tech is currently generating about 0.03 per unit of risk. If you would invest 2,420 in Xiamen Wanli Stone on August 29, 2024 and sell it today you would earn a total of 1,463 from holding Xiamen Wanli Stone or generate 60.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Wanli Stone vs. Western Superconducting Tech
Performance |
| Timeline |
| Xiamen Wanli Stone |
| Western Superconducting |
Xiamen Wanli and Western Superconducting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Wanli and Western Superconducting
The main advantage of trading using opposite Xiamen Wanli and Western Superconducting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Wanli position performs unexpectedly, Western Superconducting 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 Western Superconducting will offset losses from the drop in Western Superconducting's long position.| Xiamen Wanli vs. Metro Investment Development | Xiamen Wanli vs. Jiangsu Yueda Investment | Xiamen Wanli vs. Hubei Geoway Investment | Xiamen Wanli vs. Ningbo Fangzheng Automobile |
| Western Superconducting vs. PetroChina Co Ltd | Western Superconducting vs. China State Construction | Western Superconducting vs. China Mobile Limited | Western Superconducting vs. Industrial and Commercial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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