Correlation Between Fujian Wanchen and Wuhan Yangtze
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By analyzing existing cross correlation between Fujian Wanchen Biotechnology and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Fujian Wanchen 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 Fujian Wanchen with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Wanchen and Wuhan Yangtze.
Diversification Opportunities for Fujian Wanchen and Wuhan Yangtze
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fujian and Wuhan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Wanchen Biotechnology 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 Fujian Wanchen 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 Fujian Wanchen Biotechnology 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 Fujian Wanchen i.e., Fujian Wanchen and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Fujian Wanchen and Wuhan Yangtze
Assuming the 90 days trading horizon Fujian Wanchen Biotechnology is expected to generate 0.96 times more return on investment than Wuhan Yangtze. However, Fujian Wanchen Biotechnology is 1.04 times less risky than Wuhan Yangtze. It trades about -0.03 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about -0.36 per unit of risk. If you would invest 7,922 in Fujian Wanchen Biotechnology on October 16, 2024 and sell it today you would lose (187.00) from holding Fujian Wanchen Biotechnology or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Wanchen Biotechnology vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Fujian Wanchen Biote |
| Wuhan Yangtze Commun |
Fujian Wanchen and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Wanchen and Wuhan Yangtze
The main advantage of trading using opposite Fujian Wanchen and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Wanchen 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.| Fujian Wanchen vs. Haima Automobile Group | Fujian Wanchen vs. Holitech Technology Co | Fujian Wanchen vs. Wuhan Yangtze Communication | Fujian Wanchen vs. Sunwave Communications Co |
| Wuhan Yangtze vs. Pengxin International Mining | Wuhan Yangtze vs. Chenzhou Jingui Silver | Wuhan Yangtze vs. Jinling Hotel Corp | Wuhan Yangtze vs. Hainan Mining Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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