Correlation Between WUXI BIOLOGICS and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both WUXI BIOLOGICS and CARSALESCOM at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WUXI BIOLOGICS and CARSALESCOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WUXI BIOLOGICS UNSPADR2 and CARSALESCOM, you can compare the effects of market volatilities on WUXI BIOLOGICS and CARSALESCOM 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 WUXI BIOLOGICS with a short position of CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of WUXI BIOLOGICS and CARSALESCOM.
Diversification Opportunities for WUXI BIOLOGICS and CARSALESCOM
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between WUXI and CARSALESCOM is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding WUXI BIOLOGICS UNSPADR2 and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM and WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2 are associated (or correlated) with CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of WUXI BIOLOGICS i.e., WUXI BIOLOGICS and CARSALESCOM go up and down completely randomly.
Pair Corralation between WUXI BIOLOGICS and CARSALESCOM
Assuming the 90 days trading horizon WUXI BIOLOGICS UNSPADR2 is expected to generate 2.78 times more return on investment than CARSALESCOM. However, WUXI BIOLOGICS is 2.78 times more volatile than CARSALESCOM. It trades about 0.14 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.11 per unit of risk. If you would invest 384.00 in WUXI BIOLOGICS UNSPADR2 on September 13, 2024 and sell it today you would earn a total of 48.00 from holding WUXI BIOLOGICS UNSPADR2 or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WUXI BIOLOGICS UNSPADR2 vs. CARSALESCOM
Performance |
| Timeline |
| WUXI BIOLOGICS UNSPADR2 |
| CARSALESCOM |
WUXI BIOLOGICS and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WUXI BIOLOGICS and CARSALESCOM
The main advantage of trading using opposite WUXI BIOLOGICS and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WUXI BIOLOGICS position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| WUXI BIOLOGICS vs. Avanos Medical | WUXI BIOLOGICS vs. Microbot Medical | WUXI BIOLOGICS vs. APPLIED MATERIALS | WUXI BIOLOGICS vs. MeVis Medical Solutions |
| CARSALESCOM vs. PICKN PAY STORES | CARSALESCOM vs. MI Homes | CARSALESCOM vs. bet at home AG | CARSALESCOM vs. Caseys General Stores |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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