Correlation Between New Hope and Weihai Guangwei
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By analyzing existing cross correlation between New Hope Dairy and Weihai Guangwei Composites, you can compare the effects of market volatilities on New Hope and Weihai Guangwei 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 New Hope with a short position of Weihai Guangwei. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Weihai Guangwei.
Diversification Opportunities for New Hope and Weihai Guangwei
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Weihai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Weihai Guangwei Composites in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Guangwei Comp and New Hope 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 New Hope Dairy are associated (or correlated) with Weihai Guangwei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Guangwei Comp has no effect on the direction of New Hope i.e., New Hope and Weihai Guangwei go up and down completely randomly.
Pair Corralation between New Hope and Weihai Guangwei
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.66 times more return on investment than Weihai Guangwei. However, New Hope Dairy is 1.51 times less risky than Weihai Guangwei. It trades about 0.13 of its potential returns per unit of risk. Weihai Guangwei Composites is currently generating about 0.0 per unit of risk. If you would invest 1,229 in New Hope Dairy on September 1, 2024 and sell it today you would earn a total of 72.00 from holding New Hope Dairy or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Weihai Guangwei Composites
Performance |
| Timeline |
| New Hope Dairy |
| Weihai Guangwei Comp |
New Hope and Weihai Guangwei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Weihai Guangwei
The main advantage of trading using opposite New Hope and Weihai Guangwei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Weihai Guangwei 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 Weihai Guangwei will offset losses from the drop in Weihai Guangwei's long position.| New Hope vs. Nanjing Putian Telecommunications | New Hope vs. Shenzhen Hifuture Electric | New Hope vs. Tianjin Realty Development | New Hope vs. Shenyang Huitian Thermal |
| Weihai Guangwei vs. Xizi Clean Energy | Weihai Guangwei vs. Northern United Publishing | Weihai Guangwei vs. Keda Clean Energy | Weihai Guangwei vs. Beijing HuaYuanYiTong Thermal |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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