Correlation Between Metro Investment and Wuxi Lead
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By analyzing existing cross correlation between Metro Investment Development and Wuxi Lead Auto, you can compare the effects of market volatilities on Metro Investment and Wuxi Lead 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 Metro Investment with a short position of Wuxi Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Investment and Wuxi Lead.
Diversification Opportunities for Metro Investment and Wuxi Lead
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metro and Wuxi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Metro Investment Development and Wuxi Lead Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Lead Auto and Metro Investment 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 Metro Investment Development are associated (or correlated) with Wuxi Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Lead Auto has no effect on the direction of Metro Investment i.e., Metro Investment and Wuxi Lead go up and down completely randomly.
Pair Corralation between Metro Investment and Wuxi Lead
Assuming the 90 days trading horizon Metro Investment Development is expected to under-perform the Wuxi Lead. But the stock apears to be less risky and, when comparing its historical volatility, Metro Investment Development is 1.04 times less risky than Wuxi Lead. The stock trades about 0.0 of its potential returns per unit of risk. The Wuxi Lead Auto is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,496 in Wuxi Lead Auto on August 29, 2024 and sell it today you would lose (181.00) from holding Wuxi Lead Auto or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Investment Development vs. Wuxi Lead Auto
Performance |
| Timeline |
| Metro Investment Dev |
| Wuxi Lead Auto |
Metro Investment and Wuxi Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Investment and Wuxi Lead
The main advantage of trading using opposite Metro Investment and Wuxi Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Investment position performs unexpectedly, Wuxi Lead 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 Lead will offset losses from the drop in Wuxi Lead's long position.| Metro Investment vs. Industrial and Commercial | Metro Investment vs. China Construction Bank | Metro Investment vs. Bank of China | Metro Investment vs. Agricultural Bank of |
| Wuxi Lead vs. Metro Investment Development | Wuxi Lead vs. Chengdu Xingrong Investment | Wuxi Lead vs. Zoje Resources Investment | Wuxi Lead vs. Shandong Longquan Pipeline |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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