Correlation Between Wuhan Yangtze and Qumei Furniture
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Qumei Furniture Group, you can compare the effects of market volatilities on Wuhan Yangtze and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Qumei Furniture.
Diversification Opportunities for Wuhan Yangtze and Qumei Furniture
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Qumei is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Qumei Furniture go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Qumei Furniture
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.34 times more return on investment than Qumei Furniture. However, Wuhan Yangtze is 1.34 times more volatile than Qumei Furniture Group. It trades about 0.03 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.11 per unit of risk. If you would invest 2,391 in Wuhan Yangtze Communication on October 29, 2024 and sell it today you would earn a total of 16.00 from holding Wuhan Yangtze Communication or generate 0.67% 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. Qumei Furniture Group
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Qumei Furniture Group |
Wuhan Yangtze and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Qumei Furniture
The main advantage of trading using opposite Wuhan Yangtze and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture's long position.| Wuhan Yangtze vs. Hongrun Construction Group | Wuhan Yangtze vs. Cicc Fund Management | Wuhan Yangtze vs. Huaxia Fund Management | Wuhan Yangtze vs. Shantui Construction Machinery |
| Qumei Furniture vs. Haima Automobile Group | Qumei Furniture vs. Zotye Automobile Co | Qumei Furniture vs. Anhui Jianghuai Automobile | Qumei Furniture vs. Quectel Wireless Solutions |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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