Correlation Between Wuhan Yangtze and Fujian Wanchen
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Wuhan Yangtze and Fujian Wanchen 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 Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Fujian Wanchen.
Diversification Opportunities for Wuhan Yangtze and Fujian Wanchen
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuhan and Fujian is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote 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 Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Fujian Wanchen
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Fujian Wanchen. In addition to that, Wuhan Yangtze is 1.04 times more volatile than Fujian Wanchen Biotechnology. It trades about -0.36 of its total potential returns per unit of risk. Fujian Wanchen Biotechnology is currently generating about -0.03 per unit of volatility. If you would invest 7,922 in Fujian Wanchen Biotechnology on October 16, 2024 and sell it today you would lose (187.00) from holding Fujian Wanchen Biotechnology or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Fujian Wanchen Biote |
Wuhan Yangtze and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Fujian Wanchen
The main advantage of trading using opposite Wuhan Yangtze and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Wuhan Yangtze vs. Pengxin International Mining | Wuhan Yangtze vs. Chenzhou Jingui Silver | Wuhan Yangtze vs. Jinling Hotel Corp | Wuhan Yangtze vs. Hainan Mining Co |
| Fujian Wanchen vs. Haima Automobile Group | Fujian Wanchen vs. Holitech Technology Co | Fujian Wanchen vs. Wuhan Yangtze Communication | Fujian Wanchen vs. Sunwave Communications Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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