Correlation Between Jiangsu Financial and Weichai Heavy
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Weichai Heavy Machinery, you can compare the effects of market volatilities on Jiangsu Financial and Weichai Heavy 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 Jiangsu Financial with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Weichai Heavy.
Diversification Opportunities for Jiangsu Financial and Weichai Heavy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jiangsu and Weichai is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Jiangsu Financial 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 Jiangsu Financial Leasing are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Weichai Heavy go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Weichai Heavy
Assuming the 90 days trading horizon Jiangsu Financial is expected to generate 2.97 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Jiangsu Financial Leasing is 1.86 times less risky than Weichai Heavy. It trades about 0.04 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 972.00 in Weichai Heavy Machinery on October 27, 2024 and sell it today you would earn a total of 1,203 from holding Weichai Heavy Machinery or generate 123.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Weichai Heavy Machinery |
Jiangsu Financial and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Weichai Heavy
The main advantage of trading using opposite Jiangsu Financial and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Jiangsu Financial vs. Xinjiang Baodi Mining | Jiangsu Financial vs. Tonghua Grape Wine | Jiangsu Financial vs. Beingmate Baby Child | Jiangsu Financial vs. ZYF Lopsking Aluminum |
| Weichai Heavy vs. Ming Yang Smart | Weichai Heavy vs. 159681 | Weichai Heavy vs. 159005 | Weichai Heavy vs. Loctek Ergonomic Technology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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