Correlation Between Industrial and WuXi Xinje
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By analyzing existing cross correlation between Industrial and Commercial and WuXi Xinje Electric, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and WuXi Xinje.
Diversification Opportunities for Industrial and WuXi Xinje
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and WuXi is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 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 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 Industrial i.e., Industrial and WuXi Xinje go up and down completely randomly.
Pair Corralation between Industrial and WuXi Xinje
Assuming the 90 days trading horizon Industrial is expected to generate 3.75 times less return on investment than WuXi Xinje. But when comparing it to its historical volatility, Industrial and Commercial is 2.19 times less risky than WuXi Xinje. It trades about 0.08 of its potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,468 in WuXi Xinje Electric on October 15, 2024 and sell it today you would earn a total of 740.00 from holding WuXi Xinje Electric or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. WuXi Xinje Electric
Performance |
| Timeline |
| Industrial and Commercial |
| WuXi Xinje Electric |
Industrial and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and WuXi Xinje
The main advantage of trading using opposite Industrial and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. East Money Information | Industrial vs. Marssenger Kitchenware Co | Industrial vs. Guangzhou Ruoyuchen Information | Industrial vs. Sublime China Information |
| WuXi Xinje vs. Wuxi Chemical Equipment | WuXi Xinje vs. Guangzhou Haige Communications | WuXi Xinje vs. Shanghai Shibei Hi Tech | WuXi Xinje vs. Liuzhou Chemical Industry |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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