Correlation Between Wuhan Xianglong and Beijing Scitop
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By analyzing existing cross correlation between Wuhan Xianglong Power and Beijing Scitop Bio, you can compare the effects of market volatilities on Wuhan Xianglong and Beijing Scitop 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 Xianglong with a short position of Beijing Scitop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Beijing Scitop.
Diversification Opportunities for Wuhan Xianglong and Beijing Scitop
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Beijing is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Beijing Scitop Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Scitop Bio and Wuhan Xianglong 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 Xianglong Power are associated (or correlated) with Beijing Scitop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Scitop Bio has no effect on the direction of Wuhan Xianglong i.e., Wuhan Xianglong and Beijing Scitop go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Beijing Scitop
Assuming the 90 days trading horizon Wuhan Xianglong is expected to generate 1.37 times less return on investment than Beijing Scitop. In addition to that, Wuhan Xianglong is 2.08 times more volatile than Beijing Scitop Bio. It trades about 0.05 of its total potential returns per unit of risk. Beijing Scitop Bio is currently generating about 0.13 per unit of volatility. If you would invest 1,543 in Beijing Scitop Bio on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Beijing Scitop Bio or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Beijing Scitop Bio
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Beijing Scitop Bio |
Wuhan Xianglong and Beijing Scitop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Beijing Scitop
The main advantage of trading using opposite Wuhan Xianglong and Beijing Scitop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong position performs unexpectedly, Beijing Scitop 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 Beijing Scitop will offset losses from the drop in Beijing Scitop's long position.| Wuhan Xianglong vs. Cultural Investment Holdings | Wuhan Xianglong vs. Chengtun Mining Group | Wuhan Xianglong vs. Nuode Investment Co | Wuhan Xianglong vs. Metro Investment Development |
| Beijing Scitop vs. Southchip Semiconductor Technology | Beijing Scitop vs. Anhui Huilong Agricultural | Beijing Scitop vs. Shaanxi Construction Machinery | Beijing Scitop vs. Will Semiconductor Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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