Correlation Between WuXi AppTec and Guangdong Tianhe
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By analyzing existing cross correlation between WuXi AppTec Co and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on WuXi AppTec and Guangdong Tianhe 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 WuXi AppTec with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and Guangdong Tianhe.
Diversification Opportunities for WuXi AppTec and Guangdong Tianhe
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WuXi and Guangdong is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and WuXi AppTec 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 WuXi AppTec Co are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between WuXi AppTec and Guangdong Tianhe
Assuming the 90 days trading horizon WuXi AppTec Co is expected to generate 0.48 times more return on investment than Guangdong Tianhe. However, WuXi AppTec Co is 2.06 times less risky than Guangdong Tianhe. It trades about -0.18 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.42 per unit of risk. If you would invest 5,621 in WuXi AppTec Co on October 15, 2024 and sell it today you would lose (285.00) from holding WuXi AppTec Co or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi AppTec Co vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| WuXi AppTec |
| Guangdong Tianhe Agr |
WuXi AppTec and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and Guangdong Tianhe
The main advantage of trading using opposite WuXi AppTec and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| WuXi AppTec vs. Integrated Electronic Systems | WuXi AppTec vs. Ciwen Media Co | WuXi AppTec vs. Threes Company Media | WuXi AppTec vs. Epoxy Base Electronic |
| Guangdong Tianhe vs. Penyao Environmental Protection | Guangdong Tianhe vs. GreenTech Environmental Co | Guangdong Tianhe vs. Zoy Home Furnishing | Guangdong Tianhe vs. Fujian Nanwang Environment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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