Correlation Between Wuhan Yangtze and China Reform
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By analyzing existing cross correlation between Wuhan Yangtze Communication and China Reform Health, you can compare the effects of market volatilities on Wuhan Yangtze and China Reform 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 Wuhan Yangtze with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and China Reform.
Diversification Opportunities for Wuhan Yangtze and China Reform
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wuhan and China is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and China Reform go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and China Reform
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.63 times more return on investment than China Reform. However, Wuhan Yangtze is 1.63 times more volatile than China Reform Health. It trades about -0.16 of its potential returns per unit of risk. China Reform Health is currently generating about -0.41 per unit of risk. If you would invest 2,969 in Wuhan Yangtze Communication on October 30, 2024 and sell it today you would lose (676.00) from holding Wuhan Yangtze Communication or give up 22.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. China Reform Health
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| China Reform Health |
Wuhan Yangtze and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and China Reform
The main advantage of trading using opposite Wuhan Yangtze and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, China Reform 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 Reform will offset losses from the drop in China Reform's long position.| Wuhan Yangtze vs. Bus Online Co | Wuhan Yangtze vs. Holitech Technology Co | Wuhan Yangtze vs. Gome Telecom Equipment | Wuhan Yangtze vs. Cultural Investment Holdings |
| China Reform vs. Bank of China | China Reform vs. Kweichow Moutai Co | China Reform vs. PetroChina Co Ltd | China Reform vs. Bank of Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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