Correlation Between Dr Peng and WuXi Xinje
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By analyzing existing cross correlation between Dr Peng Telecom and WuXi Xinje Electric, you can compare the effects of market volatilities on Dr Peng and WuXi Xinje 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 Dr Peng with a short position of WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Peng and WuXi Xinje.
Diversification Opportunities for Dr Peng and WuXi Xinje
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 600804 and WuXi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dr Peng Telecom and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric and Dr Peng 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 Dr Peng Telecom are associated (or correlated) with WuXi Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of Dr Peng i.e., Dr Peng and WuXi Xinje go up and down completely randomly.
Pair Corralation between Dr Peng and WuXi Xinje
Assuming the 90 days trading horizon Dr Peng is expected to generate 18.95 times less return on investment than WuXi Xinje. In addition to that, Dr Peng is 1.5 times more volatile than WuXi Xinje Electric. It trades about 0.01 of its total potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.25 per unit of volatility. If you would invest 3,504 in WuXi Xinje Electric on September 27, 2024 and sell it today you would earn a total of 584.00 from holding WuXi Xinje Electric or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dr Peng Telecom vs. WuXi Xinje Electric
Performance |
| Timeline |
| Dr Peng Telecom |
| WuXi Xinje Electric |
Dr Peng and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dr Peng and WuXi Xinje
The main advantage of trading using opposite Dr Peng and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Peng position performs unexpectedly, WuXi Xinje 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 Xinje will offset losses from the drop in WuXi Xinje's long position.| Dr Peng vs. Chengdu Kanghua Biological | Dr Peng vs. Beijing Wantai Biological | Dr Peng vs. Suzhou Novoprotein Scientific | Dr Peng vs. COL Digital Publishing |
| WuXi Xinje vs. Industrial and Commercial | WuXi Xinje vs. China Construction Bank | WuXi Xinje vs. Agricultural Bank of | WuXi Xinje vs. Bank of China |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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