Correlation Between New Hope and Wuhan Yangtze
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By analyzing existing cross correlation between New Hope Dairy and Wuhan Yangtze Communication, you can compare the effects of market volatilities on New Hope and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Wuhan Yangtze.
Diversification Opportunities for New Hope and Wuhan Yangtze
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Wuhan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of New Hope i.e., New Hope and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between New Hope and Wuhan Yangtze
Assuming the 90 days trading horizon New Hope is expected to generate 49.03 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, New Hope Dairy is 2.5 times less risky than Wuhan Yangtze. It trades about 0.01 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Wuhan Yangtze Communication on August 27, 2024 and sell it today you would earn a total of 645.00 from holding Wuhan Yangtze Communication or generate 32.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| New Hope Dairy |
| Wuhan Yangtze Commun |
New Hope and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Wuhan Yangtze
The main advantage of trading using opposite New Hope and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
| Wuhan Yangtze vs. New Hope Dairy | Wuhan Yangtze vs. Digital China Information | Wuhan Yangtze vs. Guangzhou Ruoyuchen Information | Wuhan Yangtze vs. Northking Information 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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