Correlation Between Yonyou Auto and Weichai Heavy
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By analyzing existing cross correlation between Yonyou Auto Information and Weichai Heavy Machinery, you can compare the effects of market volatilities on Yonyou Auto and Weichai Heavy 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 Yonyou Auto with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yonyou Auto and Weichai Heavy.
Diversification Opportunities for Yonyou Auto and Weichai Heavy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yonyou and Weichai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Yonyou Auto Information and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Yonyou Auto 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 Yonyou Auto Information are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Yonyou Auto i.e., Yonyou Auto and Weichai Heavy go up and down completely randomly.
Pair Corralation between Yonyou Auto and Weichai Heavy
Assuming the 90 days trading horizon Yonyou Auto Information is expected to under-perform the Weichai Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Yonyou Auto Information is 1.03 times less risky than Weichai Heavy. The stock trades about -0.03 of its potential returns per unit of risk. The Weichai Heavy Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Weichai Heavy Machinery on August 28, 2024 and sell it today you would earn a total of 259.00 from holding Weichai Heavy Machinery or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.83% |
| Values | Daily Returns |
Yonyou Auto Information vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Yonyou Auto Information |
| Weichai Heavy Machinery |
Yonyou Auto and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yonyou Auto and Weichai Heavy
The main advantage of trading using opposite Yonyou Auto and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yonyou Auto position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Yonyou Auto vs. Agricultural Bank of | Yonyou Auto vs. Industrial and Commercial | Yonyou Auto vs. Bank of China | Yonyou Auto vs. PetroChina Co Ltd |
| Weichai Heavy vs. China Asset Management | Weichai Heavy vs. Harvest Fund Management | Weichai Heavy vs. JCHX Mining Management | Weichai Heavy vs. AVIC Fund Management |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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