Correlation Between Wuhan Yangtze and Henzhen Zhaowei
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Henzhen Zhaowei Machinery, you can compare the effects of market volatilities on Wuhan Yangtze and Henzhen Zhaowei 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 Henzhen Zhaowei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Henzhen Zhaowei.
Diversification Opportunities for Wuhan Yangtze and Henzhen Zhaowei
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuhan and Henzhen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Henzhen Zhaowei Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henzhen Zhaowei Machinery 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 Henzhen Zhaowei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henzhen Zhaowei Machinery has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Henzhen Zhaowei go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Henzhen Zhaowei
Assuming the 90 days trading horizon Wuhan Yangtze is expected to generate 1.25 times less return on investment than Henzhen Zhaowei. In addition to that, Wuhan Yangtze is 1.02 times more volatile than Henzhen Zhaowei Machinery. It trades about 0.33 of its total potential returns per unit of risk. Henzhen Zhaowei Machinery is currently generating about 0.42 per unit of volatility. If you would invest 4,622 in Henzhen Zhaowei Machinery on August 27, 2024 and sell it today you would earn a total of 2,861 from holding Henzhen Zhaowei Machinery or generate 61.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Henzhen Zhaowei Machinery
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Henzhen Zhaowei Machinery |
Wuhan Yangtze and Henzhen Zhaowei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Henzhen Zhaowei
The main advantage of trading using opposite Wuhan Yangtze and Henzhen Zhaowei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Henzhen Zhaowei 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 Henzhen Zhaowei will offset losses from the drop in Henzhen Zhaowei's long position.| Wuhan Yangtze vs. New Hope Dairy | Wuhan Yangtze vs. Digital China Information | Wuhan Yangtze vs. Guangzhou Ruoyuchen Information | Wuhan Yangtze vs. Northking Information Technology |
| Henzhen Zhaowei vs. Jiajia Food Group | Henzhen Zhaowei vs. Tongyu Communication | Henzhen Zhaowei vs. CICT Mobile Communication | Henzhen Zhaowei vs. Guangzhou Haige 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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