Correlation Between Wha Yu and CHINA DEVELOPMENT
Can any of the company-specific risk be diversified away by investing in both Wha Yu and CHINA DEVELOPMENT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wha Yu and CHINA DEVELOPMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wha Yu Industrial and CHINA DEVELOPMENT FINANCIAL, you can compare the effects of market volatilities on Wha Yu and CHINA DEVELOPMENT 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 Wha Yu with a short position of CHINA DEVELOPMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wha Yu and CHINA DEVELOPMENT.
Diversification Opportunities for Wha Yu and CHINA DEVELOPMENT
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wha and CHINA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Wha Yu Industrial and CHINA DEVELOPMENT FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA DEVELOPMENT and Wha Yu 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 Wha Yu Industrial are associated (or correlated) with CHINA DEVELOPMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA DEVELOPMENT has no effect on the direction of Wha Yu i.e., Wha Yu and CHINA DEVELOPMENT go up and down completely randomly.
Pair Corralation between Wha Yu and CHINA DEVELOPMENT
Assuming the 90 days trading horizon Wha Yu is expected to generate 1.02 times less return on investment than CHINA DEVELOPMENT. In addition to that, Wha Yu is 3.83 times more volatile than CHINA DEVELOPMENT FINANCIAL. It trades about 0.0 of its total potential returns per unit of risk. CHINA DEVELOPMENT FINANCIAL is currently generating about 0.02 per unit of volatility. If you would invest 769.00 in CHINA DEVELOPMENT FINANCIAL on December 4, 2024 and sell it today you would earn a total of 33.00 from holding CHINA DEVELOPMENT FINANCIAL or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Wha Yu Industrial vs. CHINA DEVELOPMENT FINANCIAL
Performance |
| Timeline |
| Wha Yu Industrial |
| CHINA DEVELOPMENT |
Wha Yu and CHINA DEVELOPMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wha Yu and CHINA DEVELOPMENT
The main advantage of trading using opposite Wha Yu and CHINA DEVELOPMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wha Yu position performs unexpectedly, CHINA DEVELOPMENT 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 CHINA DEVELOPMENT will offset losses from the drop in CHINA DEVELOPMENT's long position.| Wha Yu vs. Gemtek Technology Co | Wha Yu vs. Arcadyan Technology Corp | Wha Yu vs. Zinwell | Wha Yu vs. Silitech Technology Corp |
| CHINA DEVELOPMENT vs. Adata Technology Co | CHINA DEVELOPMENT vs. Data International Co | CHINA DEVELOPMENT vs. Oceanic Beverages Co | CHINA DEVELOPMENT vs. Wei Chuan Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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