Correlation Between Zhongtong Guomai and Wuxi Lead
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Wuxi Lead Auto, you can compare the effects of market volatilities on Zhongtong Guomai and Wuxi Lead 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 Zhongtong Guomai with a short position of Wuxi Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Wuxi Lead.
Diversification Opportunities for Zhongtong Guomai and Wuxi Lead
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and Wuxi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Wuxi Lead Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Lead Auto and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Wuxi Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Lead Auto has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Wuxi Lead go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Wuxi Lead
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to under-perform the Wuxi Lead. But the stock apears to be less risky and, when comparing its historical volatility, Zhongtong Guomai Communication is 1.4 times less risky than Wuxi Lead. The stock trades about -0.01 of its potential returns per unit of risk. The Wuxi Lead Auto is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,855 in Wuxi Lead Auto on September 3, 2024 and sell it today you would earn a total of 507.00 from holding Wuxi Lead Auto or generate 27.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Wuxi Lead Auto
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Wuxi Lead Auto |
Zhongtong Guomai and Wuxi Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Wuxi Lead
The main advantage of trading using opposite Zhongtong Guomai and Wuxi Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Wuxi Lead 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 Lead will offset losses from the drop in Wuxi Lead's long position.| Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Postal Savings Bank | Zhongtong Guomai vs. Bank of Communications |
| Wuxi Lead vs. Zhongtong Guomai Communication | Wuxi Lead vs. Shandong Huifa Foodstuff | Wuxi Lead vs. Shantou Wanshun Package | Wuxi Lead vs. Sunwave Communications 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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