Correlation Between WuXi Xinje and Jinlong Machinery
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By analyzing existing cross correlation between WuXi Xinje Electric and Jinlong Machinery Electronic, you can compare the effects of market volatilities on WuXi Xinje and Jinlong Machinery 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 Xinje with a short position of Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Xinje and Jinlong Machinery.
Diversification Opportunities for WuXi Xinje and Jinlong Machinery
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WuXi and Jinlong is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Xinje Electric and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery and WuXi Xinje 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 Xinje Electric are associated (or correlated) with Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of WuXi Xinje i.e., WuXi Xinje and Jinlong Machinery go up and down completely randomly.
Pair Corralation between WuXi Xinje and Jinlong Machinery
Assuming the 90 days trading horizon WuXi Xinje Electric is expected to generate 0.65 times more return on investment than Jinlong Machinery. However, WuXi Xinje Electric is 1.54 times less risky than Jinlong Machinery. It trades about 0.02 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about 0.0 per unit of risk. If you would invest 3,872 in WuXi Xinje Electric on October 16, 2024 and sell it today you would earn a total of 336.00 from holding WuXi Xinje Electric or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi Xinje Electric vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| WuXi Xinje Electric |
| Jinlong Machinery |
WuXi Xinje and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi Xinje and Jinlong Machinery
The main advantage of trading using opposite WuXi Xinje and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Xinje position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| 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 |
| Jinlong Machinery vs. Servyou Software Group | Jinlong Machinery vs. China National Software | Jinlong Machinery vs. Bingo Software Co | Jinlong Machinery vs. Dareway Software 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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