Correlation Between WuXi Xinje and Leyard Optoelectronic
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By analyzing existing cross correlation between WuXi Xinje Electric and Leyard Optoelectronic, you can compare the effects of market volatilities on WuXi Xinje and Leyard Optoelectronic 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 Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Xinje and Leyard Optoelectronic.
Diversification Opportunities for WuXi Xinje and Leyard Optoelectronic
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WuXi and Leyard is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Xinje Electric and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic 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 Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of WuXi Xinje i.e., WuXi Xinje and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between WuXi Xinje and Leyard Optoelectronic
Assuming the 90 days trading horizon WuXi Xinje Electric is expected to generate 0.48 times more return on investment than Leyard Optoelectronic. However, WuXi Xinje Electric is 2.07 times less risky than Leyard Optoelectronic. It trades about 0.23 of its potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.1 per unit of risk. If you would invest 3,588 in WuXi Xinje Electric on October 29, 2024 and sell it today you would earn a total of 1,030 from holding WuXi Xinje Electric or generate 28.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi Xinje Electric vs. Leyard Optoelectronic
Performance |
| Timeline |
| WuXi Xinje Electric |
| Leyard Optoelectronic |
WuXi Xinje and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi Xinje and Leyard Optoelectronic
The main advantage of trading using opposite WuXi Xinje and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Xinje position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic's long position.| WuXi Xinje vs. HaiXin Foods Co | WuXi Xinje vs. Bingo Software Co | WuXi Xinje vs. JuneYao Dairy Co | WuXi Xinje vs. Panda Dairy Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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