Correlation Between Wuhan Yangtze and Guangdong Qunxing
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Wuhan Yangtze and Guangdong Qunxing 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 Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Guangdong Qunxing.
Diversification Opportunities for Wuhan Yangtze and Guangdong Qunxing
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wuhan and Guangdong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys 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 Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Guangdong Qunxing
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.08 times more return on investment than Guangdong Qunxing. However, Wuhan Yangtze is 1.08 times more volatile than Guangdong Qunxing Toys. It trades about 0.03 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.02 per unit of risk. If you would invest 1,812 in Wuhan Yangtze Communication on November 5, 2024 and sell it today you would earn a total of 481.00 from holding Wuhan Yangtze Communication or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Guangdong Qunxing Toys |
Wuhan Yangtze and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Guangdong Qunxing
The main advantage of trading using opposite Wuhan Yangtze and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Wuhan Yangtze vs. Eastern Communications Co | Wuhan Yangtze vs. Jiangsu Jinling Sports | Wuhan Yangtze vs. Everdisplay Optronics Shanghai | Wuhan Yangtze vs. Beijing Bewinner Communications |
| Guangdong Qunxing vs. Eyebright Medical Technology | Guangdong Qunxing vs. Beijing HuaYuanYiTong Thermal | Guangdong Qunxing vs. Guangdong Jingyi Metal | Guangdong Qunxing vs. Shenyang Huitian Thermal |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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