Correlation Between Sany Heavy and Wuxi Chemical
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By analyzing existing cross correlation between Sany Heavy Industry and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Sany Heavy and Wuxi Chemical 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 Sany Heavy with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sany Heavy and Wuxi Chemical.
Diversification Opportunities for Sany Heavy and Wuxi Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sany and Wuxi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sany Heavy Industry and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Sany Heavy 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 Sany Heavy Industry are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Sany Heavy i.e., Sany Heavy and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Sany Heavy and Wuxi Chemical
Assuming the 90 days trading horizon Sany Heavy Industry is expected to under-perform the Wuxi Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Sany Heavy Industry is 1.82 times less risky than Wuxi Chemical. The stock trades about -0.25 of its potential returns per unit of risk. The Wuxi Chemical Equipment is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,348 in Wuxi Chemical Equipment on September 2, 2024 and sell it today you would earn a total of 293.00 from holding Wuxi Chemical Equipment or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sany Heavy Industry vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Sany Heavy Industry |
| Wuxi Chemical Equipment |
Sany Heavy and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sany Heavy and Wuxi Chemical
The main advantage of trading using opposite Sany Heavy and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sany Heavy position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Sany Heavy vs. Dymatic Chemicals | Sany Heavy vs. Shenyang Chemical Industry | Sany Heavy vs. Yangmei Chemical Co | Sany Heavy vs. Shandong Mining Machinery |
| Wuxi Chemical vs. New China Life | Wuxi Chemical vs. Ming Yang Smart | Wuxi Chemical vs. 159681 | Wuxi Chemical vs. 159005 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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