Correlation Between Aba Chemicals and Wuhan Yangtze
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By analyzing existing cross correlation between Aba Chemicals Corp and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Wuhan Yangtze.
Diversification Opportunities for Aba Chemicals and Wuhan Yangtze
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Wuhan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp 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 Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Aba Chemicals and Wuhan Yangtze
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Wuhan Yangtze. In addition to that, Aba Chemicals is 1.03 times more volatile than Wuhan Yangtze Communication. It trades about -0.01 of its total potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.06 per unit of volatility. If you would invest 1,553 in Wuhan Yangtze Communication on September 12, 2024 and sell it today you would earn a total of 1,427 from holding Wuhan Yangtze Communication or generate 91.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Aba Chemicals Corp |
| Wuhan Yangtze Commun |
Aba Chemicals and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Wuhan Yangtze
The main advantage of trading using opposite Aba Chemicals and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Wuhan Yangtze vs. Gansu Jiu Steel | Wuhan Yangtze vs. Shandong Mining Machinery | Wuhan Yangtze vs. Aba Chemicals Corp | Wuhan Yangtze vs. BlueFocus Communication Group |
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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