Correlation Between Wuhan Yangtze and Qijing Machinery
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Qijing Machinery, you can compare the effects of market volatilities on Wuhan Yangtze and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Qijing Machinery.
Diversification Opportunities for Wuhan Yangtze and Qijing Machinery
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wuhan and Qijing is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Qijing Machinery go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Qijing Machinery
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Qijing Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Wuhan Yangtze Communication is 1.32 times less risky than Qijing Machinery. The stock trades about -0.09 of its potential returns per unit of risk. The Qijing Machinery is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,290 in Qijing Machinery on October 23, 2024 and sell it today you would earn a total of 166.00 from holding Qijing Machinery or generate 12.87% 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. Qijing Machinery
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Qijing Machinery |
Wuhan Yangtze and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Qijing Machinery
The main advantage of trading using opposite Wuhan Yangtze and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| Wuhan Yangtze vs. Shanghai CEO Environmental | Wuhan Yangtze vs. Shanghai Yaoji Playing | Wuhan Yangtze vs. Cicc Fund Management | Wuhan Yangtze vs. Guangzhou Tinci Materials |
| Qijing Machinery vs. Wuhan Yangtze Communication | Qijing Machinery vs. Bank of Communications | Qijing Machinery vs. China Publishing Media | Qijing Machinery vs. China Satellite 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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