Correlation Between Hang Xiao and Wuxi Chemical
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By analyzing existing cross correlation between Hang Xiao Steel and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Hang Xiao 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 Hang Xiao with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Xiao and Wuxi Chemical.
Diversification Opportunities for Hang Xiao and Wuxi Chemical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hang and Wuxi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hang Xiao Steel 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 Hang Xiao 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 Hang Xiao Steel 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 Hang Xiao i.e., Hang Xiao and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Hang Xiao and Wuxi Chemical
Assuming the 90 days trading horizon Hang Xiao Steel is expected to under-perform the Wuxi Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Hang Xiao Steel is 1.23 times less risky than Wuxi Chemical. The stock trades about -0.03 of its potential returns per unit of risk. The Wuxi Chemical Equipment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,014 in Wuxi Chemical Equipment on November 28, 2024 and sell it today you would lose (1,663) from holding Wuxi Chemical Equipment or give up 33.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hang Xiao Steel vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Hang Xiao Steel |
| Wuxi Chemical Equipment |
Hang Xiao and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Xiao and Wuxi Chemical
The main advantage of trading using opposite Hang Xiao and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Xiao 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.| Hang Xiao vs. Kweichow Moutai Co | Hang Xiao vs. NAURA Technology Group | Hang Xiao vs. BYD Co Ltd | Hang Xiao vs. Zhejiang Orient Gene |
| Wuxi Chemical vs. Bomesc Offshore Engineering | Wuxi Chemical vs. China Sports Industry | Wuxi Chemical vs. CSSC Offshore Marine | Wuxi Chemical vs. CICC Fund Management |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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