Correlation Between Wanhua Chemical and North Huajin
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By analyzing existing cross correlation between Wanhua Chemical Group and North Huajin Chemical, you can compare the effects of market volatilities on Wanhua Chemical and North Huajin 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 Wanhua Chemical with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and North Huajin.
Diversification Opportunities for Wanhua Chemical and North Huajin
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and North is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Wanhua 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 Wanhua Chemical Group are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and North Huajin go up and down completely randomly.
Pair Corralation between Wanhua Chemical and North Huajin
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.79 times more return on investment than North Huajin. However, Wanhua Chemical Group is 1.26 times less risky than North Huajin. It trades about -0.33 of its potential returns per unit of risk. North Huajin Chemical is currently generating about -0.3 per unit of risk. If you would invest 7,413 in Wanhua Chemical Group on October 24, 2024 and sell it today you would lose (661.00) from holding Wanhua Chemical Group or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. North Huajin Chemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| North Huajin Chemical |
Wanhua Chemical and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and North Huajin
The main advantage of trading using opposite Wanhua Chemical and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.| Wanhua Chemical vs. Lontium Semiconductor Corp | Wanhua Chemical vs. Puya Semiconductor Shanghai | Wanhua Chemical vs. Liaoning Dingjide Petrochemical | Wanhua Chemical vs. Miracll Chemicals Co |
| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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