Correlation Between Wuhan Yangtze and Jiangsu Pacific
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Wuhan Yangtze and Jiangsu Pacific 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 Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Jiangsu Pacific.
Diversification Opportunities for Wuhan Yangtze and Jiangsu Pacific
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Jiangsu is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz 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 Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Jiangsu Pacific
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 0.96 times more return on investment than Jiangsu Pacific. However, Wuhan Yangtze Communication is 1.04 times less risky than Jiangsu Pacific. It trades about 0.04 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about -0.09 per unit of risk. If you would invest 2,136 in Wuhan Yangtze Communication on August 29, 2024 and sell it today you would earn a total of 449.00 from holding Wuhan Yangtze Communication or generate 21.02% 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. Jiangsu Pacific Quartz
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Jiangsu Pacific Quartz |
Wuhan Yangtze and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Jiangsu Pacific
The main advantage of trading using opposite Wuhan Yangtze and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Jiangsu Pacific 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 Jiangsu Pacific will offset losses from the drop in Jiangsu Pacific's long position.| Wuhan Yangtze vs. China State Construction | Wuhan Yangtze vs. Huafa Industrial Co | Wuhan Yangtze vs. China International Capital | Wuhan Yangtze vs. Kweichow Moutai Co |
| Jiangsu Pacific vs. Guangzhou KingTeller Technology | Jiangsu Pacific vs. Chengdu Xingrong Investment | Jiangsu Pacific vs. Western Superconducting Tech | Jiangsu Pacific vs. Hunan Investment Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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