Correlation Between Guangdong Xiongsu and WuXi AppTec
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By analyzing existing cross correlation between Guangdong Xiongsu Technology and WuXi AppTec Co, you can compare the effects of market volatilities on Guangdong Xiongsu 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 Guangdong Xiongsu with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Xiongsu and WuXi AppTec.
Diversification Opportunities for Guangdong Xiongsu and WuXi AppTec
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and WuXi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Xiongsu Technology and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and Guangdong Xiongsu 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 Guangdong Xiongsu Technology 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 Guangdong Xiongsu i.e., Guangdong Xiongsu and WuXi AppTec go up and down completely randomly.
Pair Corralation between Guangdong Xiongsu and WuXi AppTec
Assuming the 90 days trading horizon Guangdong Xiongsu Technology is expected to generate 1.45 times more return on investment than WuXi AppTec. However, Guangdong Xiongsu is 1.45 times more volatile than WuXi AppTec Co. It trades about 0.16 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.15 per unit of risk. If you would invest 502.00 in Guangdong Xiongsu Technology on September 24, 2024 and sell it today you would earn a total of 237.00 from holding Guangdong Xiongsu Technology or generate 47.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Xiongsu Technology vs. WuXi AppTec Co
Performance |
Timeline |
Guangdong Xiongsu |
WuXi AppTec |
Guangdong Xiongsu and WuXi AppTec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Xiongsu and WuXi AppTec
The main advantage of trading using opposite Guangdong Xiongsu and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Xiongsu 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.Guangdong Xiongsu vs. Kweichow Moutai Co | Guangdong Xiongsu vs. Contemporary Amperex Technology | Guangdong Xiongsu vs. G bits Network Technology | Guangdong Xiongsu vs. BYD Co Ltd |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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