Correlation Between Wuhan Xianglong and Changshu Tongrun
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By analyzing existing cross correlation between Wuhan Xianglong Power and Changshu Tongrun Auto, you can compare the effects of market volatilities on Wuhan Xianglong and Changshu Tongrun 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 Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Changshu Tongrun.
Diversification Opportunities for Wuhan Xianglong and Changshu Tongrun
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuhan and Changshu is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto 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 Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of Wuhan Xianglong i.e., Wuhan Xianglong and Changshu Tongrun go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Changshu Tongrun
Assuming the 90 days trading horizon Wuhan Xianglong is expected to generate 1.58 times less return on investment than Changshu Tongrun. In addition to that, Wuhan Xianglong is 1.37 times more volatile than Changshu Tongrun Auto. It trades about 0.06 of its total potential returns per unit of risk. Changshu Tongrun Auto is currently generating about 0.13 per unit of volatility. If you would invest 1,622 in Changshu Tongrun Auto on August 31, 2024 and sell it today you would earn a total of 184.00 from holding Changshu Tongrun Auto or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Changshu Tongrun Auto
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Changshu Tongrun Auto |
Wuhan Xianglong and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Changshu Tongrun
The main advantage of trading using opposite Wuhan Xianglong and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| Wuhan Xianglong vs. Beijing Bewinner Communications | Wuhan Xianglong vs. Shenzhen Kexin Communication | Wuhan Xianglong vs. Bomin Electronics Co | Wuhan Xianglong vs. Hangzhou Prevail Optoelectronic |
| Changshu Tongrun vs. Anhui Huaertai Chemical | Changshu Tongrun vs. Invengo Information Technology | Changshu Tongrun vs. Shenzhen Noposion Agrochemicals | Changshu Tongrun vs. Guangzhou Ruoyuchen Information |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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