Correlation Between Wuhan Yangtze and Cangzhou Mingzhu
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on Wuhan Yangtze and Cangzhou Mingzhu 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 Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Cangzhou Mingzhu.
Diversification Opportunities for Wuhan Yangtze and Cangzhou Mingzhu
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Cangzhou is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Cangzhou Mingzhu
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 2.33 times more return on investment than Cangzhou Mingzhu. However, Wuhan Yangtze is 2.33 times more volatile than Cangzhou Mingzhu Plastic. It trades about 0.06 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about -0.14 per unit of risk. If you would invest 2,226 in Wuhan Yangtze Communication on November 3, 2024 and sell it today you would earn a total of 67.00 from holding Wuhan Yangtze Communication or generate 3.01% 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. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Cangzhou Mingzhu Plastic |
Wuhan Yangtze and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Cangzhou Mingzhu
The main advantage of trading using opposite Wuhan Yangtze and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.| Wuhan Yangtze vs. GuoChuang Software Co | Wuhan Yangtze vs. Hangzhou Pinming Software | Wuhan Yangtze vs. Jiangsu Hoperun Software | Wuhan Yangtze vs. Iat Automobile Technology |
| Cangzhou Mingzhu vs. YLZ Information Tech | Cangzhou Mingzhu vs. Tongling Nonferrous Metals | Cangzhou Mingzhu vs. Dawning Information Industry | Cangzhou Mingzhu vs. Shandong Hongchuang Aluminum |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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