Correlation Between Wintao Communications and Hangzhou Weiguang
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By analyzing existing cross correlation between Wintao Communications Co and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Wintao Communications and Hangzhou Weiguang 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 Wintao Communications with a short position of Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Hangzhou Weiguang.
Diversification Opportunities for Wintao Communications and Hangzhou Weiguang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wintao and Hangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang and Wintao Communications 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 Wintao Communications Co are associated (or correlated) with Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Wintao Communications i.e., Wintao Communications and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Wintao Communications and Hangzhou Weiguang
Assuming the 90 days trading horizon Wintao Communications Co is expected to under-perform the Hangzhou Weiguang. In addition to that, Wintao Communications is 1.44 times more volatile than Hangzhou Weiguang Electronic. It trades about -0.01 of its total potential returns per unit of risk. Hangzhou Weiguang Electronic is currently generating about 0.05 per unit of volatility. If you would invest 2,043 in Hangzhou Weiguang Electronic on September 12, 2024 and sell it today you would earn a total of 590.00 from holding Hangzhou Weiguang Electronic or generate 28.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Wintao Communications |
| Hangzhou Weiguang |
Wintao Communications and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Hangzhou Weiguang
The main advantage of trading using opposite Wintao Communications and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, Hangzhou Weiguang 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 Hangzhou Weiguang will offset losses from the drop in Hangzhou Weiguang's long position.The idea behind Wintao Communications Co and Hangzhou Weiguang Electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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