Correlation Between Tonghua Grape and Wuxi Chemical
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By analyzing existing cross correlation between Tonghua Grape Wine and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Tonghua Grape and Wuxi Chemical 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 Tonghua Grape with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Wuxi Chemical.
Diversification Opportunities for Tonghua Grape and Wuxi Chemical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tonghua and Wuxi is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Tonghua Grape 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 Tonghua Grape Wine are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Tonghua Grape and Wuxi Chemical
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the Wuxi Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Tonghua Grape Wine is 1.08 times less risky than Wuxi Chemical. The stock trades about -0.01 of its potential returns per unit of risk. The Wuxi Chemical Equipment is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 3,351 in Wuxi Chemical Equipment on December 27, 2024 and sell it today you would earn a total of 470.00 from holding Wuxi Chemical Equipment or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Tonghua Grape Wine |
| Wuxi Chemical Equipment |
Tonghua Grape and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Wuxi Chemical
The main advantage of trading using opposite Tonghua Grape and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Tonghua Grape vs. FSPG Hi Tech Co | Tonghua Grape vs. Eastern Communications Co | Tonghua Grape vs. Changchun Engley Automobile | Tonghua Grape vs. Runjian Communication Co |
| Wuxi Chemical vs. Kuangda Technology Group | Wuxi Chemical vs. Linewell Software Co | Wuxi Chemical vs. Beijing Bewinner Communications | Wuxi Chemical vs. Tongyu 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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