Correlation Between Wuxi Chemical and Shenyang Chemical
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Shenyang Chemical Industry, you can compare the effects of market volatilities on Wuxi Chemical and Shenyang Chemical 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 Wuxi Chemical with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Shenyang Chemical.
Diversification Opportunities for Wuxi Chemical and Shenyang Chemical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuxi and Shenyang is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Wuxi Chemical 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 Wuxi Chemical Equipment are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Shenyang Chemical
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to generate 1.01 times more return on investment than Shenyang Chemical. However, Wuxi Chemical is 1.01 times more volatile than Shenyang Chemical Industry. It trades about 0.0 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.02 per unit of risk. If you would invest 4,337 in Wuxi Chemical Equipment on October 18, 2024 and sell it today you would lose (877.00) from holding Wuxi Chemical Equipment or give up 20.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Shenyang Chemical |
Wuxi Chemical and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Shenyang Chemical
The main advantage of trading using opposite Wuxi Chemical and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Wuxi Chemical vs. Linewell Software Co | Wuxi Chemical vs. Digiwin Software Co | Wuxi Chemical vs. Innovative Medical Management | Wuxi Chemical vs. Eyebright Medical Technology |
| Shenyang Chemical vs. Eastroc Beverage Group | Shenyang Chemical vs. Impulse Qingdao Health | Shenyang Chemical vs. Offshore Oil Engineering | Shenyang Chemical vs. Jiangsu Yanghe Brewery |
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 Stocks Directory module to find actively traded stocks across global markets.
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