Correlation Between Wuhan Yangtze and China Molybdenum
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By analyzing existing cross correlation between Wuhan Yangtze Communication and China Molybdenum Co, you can compare the effects of market volatilities on Wuhan Yangtze and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and China Molybdenum.
Diversification Opportunities for Wuhan Yangtze and China Molybdenum
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wuhan and China is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and China Molybdenum go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and China Molybdenum
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.42 times more return on investment than China Molybdenum. However, Wuhan Yangtze is 1.42 times more volatile than China Molybdenum Co. It trades about 0.05 of its potential returns per unit of risk. China Molybdenum Co is currently generating about 0.05 per unit of risk. If you would invest 1,669 in Wuhan Yangtze Communication on August 30, 2024 and sell it today you would earn a total of 1,175 from holding Wuhan Yangtze Communication or generate 70.4% 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. China Molybdenum Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| China Molybdenum |
Wuhan Yangtze and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and China Molybdenum
The main advantage of trading using opposite Wuhan Yangtze and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum'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 |
| China Molybdenum vs. Beijing Yanjing Brewery | China Molybdenum vs. CICC Fund Management | China Molybdenum vs. Eastroc Beverage Group | China Molybdenum vs. Shenzhen Kexin Communication |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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