Correlation Between Wintao Communications and Kangyue Technology
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By analyzing existing cross correlation between Wintao Communications Co and Kangyue Technology Co, you can compare the effects of market volatilities on Wintao Communications and Kangyue Technology 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 Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Kangyue Technology.
Diversification Opportunities for Wintao Communications and Kangyue Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wintao and Kangyue is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of Wintao Communications i.e., Wintao Communications and Kangyue Technology go up and down completely randomly.
Pair Corralation between Wintao Communications and Kangyue Technology
Assuming the 90 days trading horizon Wintao Communications Co is expected to generate 0.9 times more return on investment than Kangyue Technology. However, Wintao Communications Co is 1.12 times less risky than Kangyue Technology. It trades about 0.0 of its potential returns per unit of risk. Kangyue Technology Co is currently generating about -0.21 per unit of risk. If you would invest 2,368 in Wintao Communications Co on September 25, 2024 and sell it today you would lose (13.00) from holding Wintao Communications Co or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Kangyue Technology Co
Performance |
| Timeline |
| Wintao Communications |
| Kangyue Technology |
Wintao Communications and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Kangyue Technology
The main advantage of trading using opposite Wintao Communications and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, Kangyue Technology 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.The idea behind Wintao Communications Co and Kangyue Technology Co 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.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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