Correlation Between Hangzhou Prevail and Wuhan Xianglong
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By analyzing existing cross correlation between Hangzhou Prevail Optoelectronic and Wuhan Xianglong Power, you can compare the effects of market volatilities on Hangzhou Prevail and Wuhan Xianglong 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 Hangzhou Prevail with a short position of Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Prevail and Wuhan Xianglong.
Diversification Opportunities for Hangzhou Prevail and Wuhan Xianglong
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hangzhou and Wuhan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Prevail Optoelectroni and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power and Hangzhou Prevail 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 Hangzhou Prevail Optoelectronic are associated (or correlated) with Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Hangzhou Prevail i.e., Hangzhou Prevail and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Hangzhou Prevail and Wuhan Xianglong
Assuming the 90 days trading horizon Hangzhou Prevail Optoelectronic is expected to generate 0.54 times more return on investment than Wuhan Xianglong. However, Hangzhou Prevail Optoelectronic is 1.87 times less risky than Wuhan Xianglong. It trades about 0.06 of its potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.03 per unit of risk. If you would invest 2,008 in Hangzhou Prevail Optoelectronic on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Hangzhou Prevail Optoelectronic or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Prevail Optoelectroni vs. Wuhan Xianglong Power
Performance |
| Timeline |
| Hangzhou Prevail Opt |
| Wuhan Xianglong Power |
Hangzhou Prevail and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Prevail and Wuhan Xianglong
The main advantage of trading using opposite Hangzhou Prevail and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Prevail position performs unexpectedly, Wuhan Xianglong 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 Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Hangzhou Prevail vs. Industrial and Commercial | Hangzhou Prevail vs. Kweichow Moutai Co | Hangzhou Prevail vs. Agricultural Bank of | Hangzhou Prevail vs. China Mobile Limited |
| Wuhan Xianglong vs. Sinomach General Machinery | Wuhan Xianglong vs. Oppein Home Group | Wuhan Xianglong vs. Qijing Machinery | Wuhan Xianglong vs. Vohringer Home 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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