Correlation Between Wuhan Yangtze and Tianjin Yiyi
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Tianjin Yiyi Hygiene, you can compare the effects of market volatilities on Wuhan Yangtze and Tianjin Yiyi 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 Tianjin Yiyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Tianjin Yiyi.
Diversification Opportunities for Wuhan Yangtze and Tianjin Yiyi
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Tianjin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Tianjin Yiyi Hygiene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Yiyi Hygiene 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 Tianjin Yiyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Yiyi Hygiene has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Tianjin Yiyi go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Tianjin Yiyi
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.37 times more return on investment than Tianjin Yiyi. However, Wuhan Yangtze is 1.37 times more volatile than Tianjin Yiyi Hygiene. It trades about 0.05 of its potential returns per unit of risk. Tianjin Yiyi Hygiene is currently generating about 0.01 per unit of risk. If you would invest 1,675 in Wuhan Yangtze Communication on September 4, 2024 and sell it today you would earn a total of 1,187 from holding Wuhan Yangtze Communication or generate 70.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Tianjin Yiyi Hygiene
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Tianjin Yiyi Hygiene |
Wuhan Yangtze and Tianjin Yiyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Tianjin Yiyi
The main advantage of trading using opposite Wuhan Yangtze and Tianjin Yiyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Tianjin Yiyi 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 Tianjin Yiyi will offset losses from the drop in Tianjin Yiyi's long position.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Bank of China | Wuhan Yangtze vs. Agricultural Bank of |
| Tianjin Yiyi vs. Nuode Investment Co | Tianjin Yiyi vs. Xilinmen Furniture Co | Tianjin Yiyi vs. Vohringer Home Technology | Tianjin Yiyi vs. Zhangjiagang Freetrade Science |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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