Correlation Between Bank of XiAn and Wuhan Yangtze
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By analyzing existing cross correlation between Bank of XiAn and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Bank of XiAn and Wuhan Yangtze 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 Bank of XiAn with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of XiAn and Wuhan Yangtze.
Diversification Opportunities for Bank of XiAn and Wuhan Yangtze
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Wuhan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of XiAn and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun and Bank of XiAn 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 Bank of XiAn are associated (or correlated) with Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Bank of XiAn i.e., Bank of XiAn and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Bank of XiAn and Wuhan Yangtze
Assuming the 90 days trading horizon Bank of XiAn is expected to generate 5.16 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, Bank of XiAn is 2.68 times less risky than Wuhan Yangtze. It trades about 0.08 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,103 in Wuhan Yangtze Communication on November 4, 2024 and sell it today you would earn a total of 190.00 from holding Wuhan Yangtze Communication or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of XiAn vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Bank of XiAn |
| Wuhan Yangtze Commun |
Bank of XiAn and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of XiAn and Wuhan Yangtze
The main advantage of trading using opposite Bank of XiAn and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of XiAn position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Bank of XiAn vs. Elite Color Environmental | Bank of XiAn vs. Hangzhou Guotai Environmental | Bank of XiAn vs. City Development Environment | Bank of XiAn vs. Songz Automobile Air |
| Wuhan Yangtze vs. Gan Yuan Foods | Wuhan Yangtze vs. Yan Tai Shuang | Wuhan Yangtze vs. Nuode Investment Co | Wuhan Yangtze vs. Yankershop Food 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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