Correlation Between Renxin New and Wuhan Yangtze
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By analyzing existing cross correlation between Renxin New Material and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Renxin New 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 Renxin New with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renxin New and Wuhan Yangtze.
Diversification Opportunities for Renxin New and Wuhan Yangtze
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Renxin and Wuhan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Renxin New Material 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 Renxin New 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 Renxin New Material 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 Renxin New i.e., Renxin New and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Renxin New and Wuhan Yangtze
Assuming the 90 days trading horizon Renxin New Material is expected to generate 0.51 times more return on investment than Wuhan Yangtze. However, Renxin New Material is 1.97 times less risky than Wuhan Yangtze. It trades about -0.51 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about -0.35 per unit of risk. If you would invest 1,294 in Renxin New Material on October 9, 2024 and sell it today you would lose (234.00) from holding Renxin New Material or give up 18.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renxin New Material vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Renxin New Material |
| Wuhan Yangtze Commun |
Renxin New and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renxin New and Wuhan Yangtze
The main advantage of trading using opposite Renxin New and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renxin New 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.| Renxin New vs. Zijin Mining Group | Renxin New vs. Wanhua Chemical Group | Renxin New vs. Baoshan Iron Steel | Renxin New vs. Shandong Gold Mining |
| Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. NAURA Technology Group | Wuhan Yangtze vs. Zhejiang Orient Gene | Wuhan Yangtze vs. APT Medical |
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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