Correlation Between Wuhan Yangtze and CIMC Vehicles
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By analyzing existing cross correlation between Wuhan Yangtze Communication and CIMC Vehicles Co, you can compare the effects of market volatilities on Wuhan Yangtze and CIMC Vehicles 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 CIMC Vehicles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and CIMC Vehicles.
Diversification Opportunities for Wuhan Yangtze and CIMC Vehicles
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and CIMC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and CIMC Vehicles Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMC Vehicles 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 CIMC Vehicles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMC Vehicles has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and CIMC Vehicles go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and CIMC Vehicles
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.2 times more return on investment than CIMC Vehicles. However, Wuhan Yangtze is 1.2 times more volatile than CIMC Vehicles Co. It trades about 0.05 of its potential returns per unit of risk. CIMC Vehicles Co is currently generating about 0.03 per unit of risk. If you would invest 1,685 in Wuhan Yangtze Communication on September 3, 2024 and sell it today you would earn a total of 1,284 from holding Wuhan Yangtze Communication or generate 76.2% 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. CIMC Vehicles Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| CIMC Vehicles |
Wuhan Yangtze and CIMC Vehicles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and CIMC Vehicles
The main advantage of trading using opposite Wuhan Yangtze and CIMC Vehicles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, CIMC Vehicles 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 CIMC Vehicles will offset losses from the drop in CIMC Vehicles' long position.| Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Postal Savings Bank | Wuhan Yangtze vs. Bank of Communications |
| CIMC Vehicles vs. Bangyan Technology Co | CIMC Vehicles vs. Uroica Mining Safety | CIMC Vehicles vs. Shengda Mining Co | CIMC Vehicles 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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