Correlation Between Wabash National and Fuwei Films
Can any of the company-specific risk be diversified away by investing in both Wabash National and Fuwei Films at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wabash National and Fuwei Films into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Fuwei Films Holdings, you can compare the effects of market volatilities on Wabash National and Fuwei Films 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 Wabash National with a short position of Fuwei Films. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Fuwei Films.
Diversification Opportunities for Wabash National and Fuwei Films
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wabash and Fuwei is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Fuwei Films Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuwei Films Holdings and Wabash National 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 Wabash National are associated (or correlated) with Fuwei Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuwei Films Holdings has no effect on the direction of Wabash National i.e., Wabash National and Fuwei Films go up and down completely randomly.
Pair Corralation between Wabash National and Fuwei Films
If you would invest 848.00 in Fuwei Films Holdings on March 1, 2024 and sell it today you would earn a total of 0.00 from holding Fuwei Films Holdings or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Wabash National vs. Fuwei Films Holdings
Performance |
Timeline |
Wabash National |
Fuwei Films Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wabash National and Fuwei Films Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wabash National and Fuwei Films
The main advantage of trading using opposite Wabash National and Fuwei Films positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Fuwei Films 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 Fuwei Films will offset losses from the drop in Fuwei Films' long position.Wabash National vs. AGCO Corporation | Wabash National vs. Deere Company | Wabash National vs. Lindsay | Wabash National vs. Lion Electric Corp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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