Correlation Between Wuhan Yangtze and Guizhou Chanhen
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Wuhan Yangtze and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Guizhou Chanhen.
Diversification Opportunities for Wuhan Yangtze and Guizhou Chanhen
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wuhan and Guizhou is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Guizhou Chanhen
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Guizhou Chanhen. In addition to that, Wuhan Yangtze is 1.39 times more volatile than Guizhou Chanhen Chemical. It trades about -0.25 of its total potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.04 per unit of volatility. If you would invest 2,238 in Guizhou Chanhen Chemical on October 16, 2024 and sell it today you would lose (54.00) from holding Guizhou Chanhen Chemical or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Guizhou Chanhen Chemical |
Wuhan Yangtze and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Guizhou Chanhen
The main advantage of trading using opposite Wuhan Yangtze and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Wuhan Yangtze vs. Guosheng Financial Holding | Wuhan Yangtze vs. Jinlong Machinery Electronic | Wuhan Yangtze vs. Shenzhen Zhongzhuang Construction | Wuhan Yangtze vs. Masterwork Machinery |
| Guizhou Chanhen vs. Nanjing Putian Telecommunications | Guizhou Chanhen vs. Wuhan Yangtze Communication | Guizhou Chanhen vs. CITIC Guoan Information | Guizhou Chanhen vs. Songz Automobile Air |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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