Correlation Between Wuhan Yangtze and Shandong Iron
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Shandong Iron and, you can compare the effects of market volatilities on Wuhan Yangtze and Shandong Iron 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 Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Shandong Iron.
Diversification Opportunities for Wuhan Yangtze and Shandong Iron
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wuhan and Shandong is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron 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 Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Shandong Iron go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Shandong Iron
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.96 times more return on investment than Shandong Iron. However, Wuhan Yangtze is 1.96 times more volatile than Shandong Iron and. It trades about 0.17 of its potential returns per unit of risk. Shandong Iron and is currently generating about 0.08 per unit of risk. If you would invest 2,096 in Wuhan Yangtze Communication on November 6, 2024 and sell it today you would earn a total of 197.00 from holding Wuhan Yangtze Communication or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Shandong Iron and
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Shandong Iron |
Wuhan Yangtze and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Shandong Iron
The main advantage of trading using opposite Wuhan Yangtze and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Shandong Iron 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 Shandong Iron will offset losses from the drop in Shandong Iron's long position.| Wuhan Yangtze vs. Qingdao Haier Biomedical | Wuhan Yangtze vs. Sinomach Automobile Co | Wuhan Yangtze vs. Wintao Communications Co | Wuhan Yangtze vs. Dongfeng Automobile Co |
| Shandong Iron vs. Wintao Communications Co | Shandong Iron vs. Chison Medical Technologies | Shandong Iron vs. Holitech Technology Co | Shandong Iron vs. Allmed Medical Products |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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