Correlation Between China Telecom and WuXi AppTec
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By analyzing existing cross correlation between China Telecom Corp and WuXi AppTec Co, you can compare the effects of market volatilities on China Telecom 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 Telecom with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and WuXi AppTec.
Diversification Opportunities for China Telecom and WuXi AppTec
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and WuXi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp 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 Telecom 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 Telecom Corp 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 Telecom i.e., China Telecom and WuXi AppTec go up and down completely randomly.
Pair Corralation between China Telecom and WuXi AppTec
Assuming the 90 days trading horizon China Telecom is expected to generate 1.33 times less return on investment than WuXi AppTec. But when comparing it to its historical volatility, China Telecom Corp is 2.47 times less risky than WuXi AppTec. It trades about 0.48 of its potential returns per unit of risk. 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 | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Telecom Corp vs. WuXi AppTec Co
Performance |
Timeline |
China Telecom Corp |
WuXi AppTec |
China Telecom and WuXi AppTec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Telecom and WuXi AppTec
The main advantage of trading using opposite China Telecom and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom 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 Telecom vs. Chengdu Kanghua Biological | China Telecom vs. Beijing Wantai Biological | China Telecom vs. Suzhou Novoprotein Scientific | China Telecom vs. COL Digital Publishing |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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