Correlation Between Industrial and Wuhan Yangtze
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By analyzing existing cross correlation between Industrial and Commercial and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Wuhan Yangtze.
Diversification Opportunities for Industrial and Wuhan Yangtze
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Industrial and Wuhan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Industrial and Wuhan Yangtze
Assuming the 90 days trading horizon Industrial is expected to generate 126.79 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, Industrial and Commercial is 7.28 times less risky than Wuhan Yangtze. It trades about 0.02 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,865 in Wuhan Yangtze Communication on September 3, 2024 and sell it today you would earn a total of 1,104 from holding Wuhan Yangtze Communication or generate 59.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Industrial and Commercial |
| Wuhan Yangtze Commun |
Industrial and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Wuhan Yangtze
The main advantage of trading using opposite Industrial and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Tengda Construction Group | Industrial vs. Hongrun Construction Group | Industrial vs. HUAQIN TECHNOLOGY LTD | Industrial vs. Sinomach General Machinery |
| Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Postal Savings Bank | Wuhan Yangtze vs. Bank of Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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