Correlation Between Beijing YanDong and Wuxi Chemical
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By analyzing existing cross correlation between Beijing YanDong MicroElectronic and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Beijing YanDong and Wuxi Chemical 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 Beijing YanDong with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing YanDong and Wuxi Chemical.
Diversification Opportunities for Beijing YanDong and Wuxi Chemical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Wuxi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Beijing YanDong MicroElectroni and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Beijing YanDong 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 Beijing YanDong MicroElectronic are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Beijing YanDong i.e., Beijing YanDong and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Beijing YanDong and Wuxi Chemical
Assuming the 90 days trading horizon Beijing YanDong MicroElectronic is expected to under-perform the Wuxi Chemical. In addition to that, Beijing YanDong is 1.73 times more volatile than Wuxi Chemical Equipment. It trades about -0.17 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about -0.14 per unit of volatility. If you would invest 3,601 in Wuxi Chemical Equipment on October 12, 2024 and sell it today you would lose (215.00) from holding Wuxi Chemical Equipment or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing YanDong MicroElectroni vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Beijing YanDong Micr |
| Wuxi Chemical Equipment |
Beijing YanDong and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing YanDong and Wuxi Chemical
The main advantage of trading using opposite Beijing YanDong and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing YanDong position performs unexpectedly, Wuxi Chemical 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 Chemical will offset losses from the drop in Wuxi Chemical's long position.| Beijing YanDong vs. Ping An Insurance | Beijing YanDong vs. China Life Insurance | Beijing YanDong vs. Hubei Geoway Investment | Beijing YanDong vs. Penyao Environmental Protection |
| Wuxi Chemical vs. Beijing YanDong MicroElectronic | Wuxi Chemical vs. Integrated Electronic Systems | Wuxi Chemical vs. Chengdu Xingrong Investment | Wuxi Chemical vs. Postal Savings Bank |
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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