Correlation Between Bomin Electronics and Wuhan Xianglong
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By analyzing existing cross correlation between Bomin Electronics Co and Wuhan Xianglong Power, you can compare the effects of market volatilities on Bomin Electronics and Wuhan Xianglong 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 Bomin Electronics with a short position of Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bomin Electronics and Wuhan Xianglong.
Diversification Opportunities for Bomin Electronics and Wuhan Xianglong
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bomin and Wuhan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bomin Electronics Co and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power and Bomin Electronics 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 Bomin Electronics Co are associated (or correlated) with Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Bomin Electronics i.e., Bomin Electronics and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Bomin Electronics and Wuhan Xianglong
Assuming the 90 days trading horizon Bomin Electronics is expected to generate 1.22 times less return on investment than Wuhan Xianglong. But when comparing it to its historical volatility, Bomin Electronics Co is 1.94 times less risky than Wuhan Xianglong. It trades about 0.04 of its potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,226 in Wuhan Xianglong Power on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Wuhan Xianglong Power or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bomin Electronics Co vs. Wuhan Xianglong Power
Performance |
| Timeline |
| Bomin Electronics |
| Wuhan Xianglong Power |
Bomin Electronics and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bomin Electronics and Wuhan Xianglong
The main advantage of trading using opposite Bomin Electronics and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bomin Electronics position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Bomin Electronics vs. Rising Nonferrous Metals | Bomin Electronics vs. Shenwu Energy Saving | Bomin Electronics vs. Ping An Insurance | Bomin Electronics vs. Sino Platinum Metals Co |
| Wuhan Xianglong vs. Sinomach General Machinery | Wuhan Xianglong vs. Oppein Home Group | Wuhan Xianglong vs. Qijing Machinery | Wuhan Xianglong vs. Vohringer Home Technology |
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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