Correlation Between Wuhan Yangtze and Xinjiang Baodi
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Wuhan Yangtze and Xinjiang Baodi 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 Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Xinjiang Baodi.
Diversification Opportunities for Wuhan Yangtze and Xinjiang Baodi
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuhan and Xinjiang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining 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 Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Xinjiang Baodi
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.58 times more return on investment than Xinjiang Baodi. However, Wuhan Yangtze is 1.58 times more volatile than Xinjiang Baodi Mining. It trades about 0.26 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about 0.13 per unit of risk. If you would invest 1,546 in Wuhan Yangtze Communication on August 25, 2024 and sell it today you would earn a total of 1,321 from holding Wuhan Yangtze Communication or generate 85.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Xinjiang Baodi Mining |
Wuhan Yangtze and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Xinjiang Baodi
The main advantage of trading using opposite Wuhan Yangtze and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.| Wuhan Yangtze vs. Beijing Yanjing Brewery | Wuhan Yangtze vs. GKHT Medical Technology | Wuhan Yangtze vs. Touchstone International Medical | Wuhan Yangtze vs. Shandong Polymer Biochemicals |
| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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