Correlation Between PLAY2CHILL and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both PLAY2CHILL and WuXi AppTec at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PLAY2CHILL and WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAY2CHILL SA ZY and WuXi AppTec Co, you can compare the effects of market volatilities on PLAY2CHILL and WuXi AppTec 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 PLAY2CHILL with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAY2CHILL and WuXi AppTec.
Diversification Opportunities for PLAY2CHILL and WuXi AppTec
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAY2CHILL and WuXi is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PLAY2CHILL SA ZY and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and PLAY2CHILL 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 PLAY2CHILL SA ZY are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of PLAY2CHILL i.e., PLAY2CHILL and WuXi AppTec go up and down completely randomly.
Pair Corralation between PLAY2CHILL and WuXi AppTec
Assuming the 90 days horizon PLAY2CHILL SA ZY is expected to generate 0.89 times more return on investment than WuXi AppTec. However, PLAY2CHILL SA ZY is 1.13 times less risky than WuXi AppTec. It trades about 0.18 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about -0.08 per unit of risk. If you would invest 80.00 in PLAY2CHILL SA ZY on August 29, 2024 and sell it today you would earn a total of 11.00 from holding PLAY2CHILL SA ZY or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAY2CHILL SA ZY vs. WuXi AppTec Co
Performance |
| Timeline |
| PLAY2CHILL SA ZY |
| WuXi AppTec |
PLAY2CHILL and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAY2CHILL and WuXi AppTec
The main advantage of trading using opposite PLAY2CHILL and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAY2CHILL position performs unexpectedly, WuXi AppTec 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 AppTec will offset losses from the drop in WuXi AppTec's long position.| PLAY2CHILL vs. Sea Limited | PLAY2CHILL vs. Superior Plus Corp | PLAY2CHILL vs. NMI Holdings | PLAY2CHILL vs. SIVERS SEMICONDUCTORS AB |
| WuXi AppTec vs. RYU Apparel | WuXi AppTec vs. PLAY2CHILL SA ZY | WuXi AppTec vs. Columbia Sportswear | WuXi AppTec vs. URBAN OUTFITTERS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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