Correlation Between Suzhou Weizhixiang and Aba Chemicals
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Aba Chemicals Corp, you can compare the effects of market volatilities on Suzhou Weizhixiang and Aba Chemicals 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 Suzhou Weizhixiang with a short position of Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Aba Chemicals.
Diversification Opportunities for Suzhou Weizhixiang and Aba Chemicals
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Suzhou and Aba is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food are associated (or correlated) with Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Aba Chemicals go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Aba Chemicals
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to generate 1.08 times more return on investment than Aba Chemicals. However, Suzhou Weizhixiang is 1.08 times more volatile than Aba Chemicals Corp. It trades about 0.26 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.02 per unit of risk. If you would invest 2,110 in Suzhou Weizhixiang Food on September 3, 2024 and sell it today you would earn a total of 390.00 from holding Suzhou Weizhixiang Food or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. Aba Chemicals Corp
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| Aba Chemicals Corp |
Suzhou Weizhixiang and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and Aba Chemicals
The main advantage of trading using opposite Suzhou Weizhixiang and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' long position.| Suzhou Weizhixiang vs. Beijing Wantai Biological | Suzhou Weizhixiang vs. Aluminum Corp of | Suzhou Weizhixiang vs. COL Digital Publishing | Suzhou Weizhixiang vs. Shaanxi Meineng Clean |
| Aba Chemicals vs. StarPower Semiconductor | Aba Chemicals vs. Suzhou Weizhixiang Food | Aba Chemicals vs. Shanghai Xinhua Media | Aba Chemicals vs. Beijing Bashi Media |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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