Correlation Between Guizhou Chanhen and Weichai Heavy
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Weichai Heavy Machinery, you can compare the effects of market volatilities on Guizhou Chanhen 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 Guizhou Chanhen with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Weichai Heavy.
Diversification Opportunities for Guizhou Chanhen and Weichai Heavy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guizhou and Weichai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical 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 Guizhou Chanhen 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 Guizhou Chanhen Chemical 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 Guizhou Chanhen i.e., Guizhou Chanhen and Weichai Heavy go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Weichai Heavy
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to under-perform the Weichai Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Guizhou Chanhen Chemical is 2.41 times less risky than Weichai Heavy. The stock trades about -0.05 of its potential returns per unit of risk. The Weichai Heavy Machinery is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,226 in Weichai Heavy Machinery on October 11, 2024 and sell it today you would earn a total of 600.00 from holding Weichai Heavy Machinery or generate 48.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Weichai Heavy Machinery |
Guizhou Chanhen and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Weichai Heavy
The main advantage of trading using opposite Guizhou Chanhen and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen 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.| Guizhou Chanhen vs. Fibocom Wireless | Guizhou Chanhen vs. Haima Automobile Group | Guizhou Chanhen vs. Huaxia Fund Management | Guizhou Chanhen vs. Allwin Telecommunication Co |
| Weichai Heavy vs. Lonkey Industrial Co | Weichai Heavy vs. Universal Scientific Industrial | Weichai Heavy vs. Sportsoul Co Ltd | Weichai Heavy vs. Tibet Huayu Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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