Correlation Between Wuxi Chemical and Shanghai Phichem
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By analyzing existing cross correlation between Wuxi Chemical Equipment and Shanghai Phichem Material, you can compare the effects of market volatilities on Wuxi Chemical and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Chemical and Shanghai Phichem.
Diversification Opportunities for Wuxi Chemical and Shanghai Phichem
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuxi and Shanghai is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Chemical Equipment and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Wuxi Chemical i.e., Wuxi Chemical and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Wuxi Chemical and Shanghai Phichem
Assuming the 90 days trading horizon Wuxi Chemical Equipment is expected to under-perform the Shanghai Phichem. But the stock apears to be less risky and, when comparing its historical volatility, Wuxi Chemical Equipment is 1.3 times less risky than Shanghai Phichem. The stock trades about 0.0 of its potential returns per unit of risk. The Shanghai Phichem Material is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,843 in Shanghai Phichem Material on October 26, 2024 and sell it today you would lose (229.00) from holding Shanghai Phichem Material or give up 12.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Chemical Equipment vs. Shanghai Phichem Material
Performance |
| Timeline |
| Wuxi Chemical Equipment |
| Shanghai Phichem Material |
Wuxi Chemical and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Chemical and Shanghai Phichem
The main advantage of trading using opposite Wuxi Chemical and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Chemical position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.| Wuxi Chemical vs. Wuhan Yangtze Communication | Wuxi Chemical vs. Ping An Insurance | Wuxi Chemical vs. Eastern Air Logistics | Wuxi Chemical vs. China Mobile Limited |
| Shanghai Phichem vs. COL Digital Publishing | Shanghai Phichem vs. Jiangsu Phoenix Publishing | Shanghai Phichem vs. Offcn Education Technology | Shanghai Phichem vs. Chengtun Mining Group |
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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