Correlation Between China Vanke and WuXi AppTec
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By analyzing existing cross correlation between China Vanke Co and WuXi AppTec Co, you can compare the effects of market volatilities on China Vanke 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 China Vanke with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and WuXi AppTec.
Diversification Opportunities for China Vanke and WuXi AppTec
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and WuXi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and China Vanke 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 China Vanke Co 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 China Vanke i.e., China Vanke and WuXi AppTec go up and down completely randomly.
Pair Corralation between China Vanke and WuXi AppTec
Assuming the 90 days trading horizon China Vanke Co is expected to under-perform the WuXi AppTec. But the stock apears to be less risky and, when comparing its historical volatility, China Vanke Co is 1.55 times less risky than WuXi AppTec. The stock trades about -0.2 of its potential returns per unit of risk. The WuXi AppTec Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,910 in WuXi AppTec Co on September 24, 2024 and sell it today you would earn a total of 669.00 from holding WuXi AppTec Co or generate 13.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Vanke Co vs. WuXi AppTec Co
Performance |
Timeline |
China Vanke |
WuXi AppTec |
China Vanke and WuXi AppTec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Vanke and WuXi AppTec
The main advantage of trading using opposite China Vanke and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke 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.China Vanke vs. PetroChina Co Ltd | China Vanke vs. China Mobile Limited | China Vanke vs. CNOOC Limited | China Vanke vs. Ping An Insurance |
WuXi AppTec vs. Poly Real Estate | WuXi AppTec vs. China Vanke Co | WuXi AppTec vs. China Merchants Shekou | WuXi AppTec vs. Huafa Industrial Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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