Correlation Between Wuhan Xianglong and Cambricon Technologies
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By analyzing existing cross correlation between Wuhan Xianglong Power and Cambricon Technologies Corp, you can compare the effects of market volatilities on Wuhan Xianglong and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Cambricon Technologies.
Diversification Opportunities for Wuhan Xianglong and Cambricon Technologies
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuhan and Cambricon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Wuhan Xianglong i.e., Wuhan Xianglong and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Cambricon Technologies
Assuming the 90 days trading horizon Wuhan Xianglong is expected to generate 1.92 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Wuhan Xianglong Power is 1.35 times less risky than Cambricon Technologies. It trades about 0.13 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 17,253 in Cambricon Technologies Corp on August 28, 2024 and sell it today you would earn a total of 31,647 from holding Cambricon Technologies Corp or generate 183.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Cambricon Technologies Corp
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Cambricon Technologies |
Wuhan Xianglong and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Cambricon Technologies
The main advantage of trading using opposite Wuhan Xianglong and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.| Wuhan Xianglong vs. Ming Yang Smart | Wuhan Xianglong vs. 159681 | Wuhan Xianglong vs. 159005 | Wuhan Xianglong vs. Loctek Ergonomic Technology |
| Cambricon Technologies vs. Hainan Mining Co | Cambricon Technologies vs. Jiangsu Jinling Sports | Cambricon Technologies vs. Shuhua Sports Co | Cambricon Technologies vs. Guangzhou Haozhi Industrial |
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 Stocks Directory module to find actively traded stocks across global markets.
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