Correlation Between Wanhua Chemical and Maoming Petro-Chemical
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By analyzing existing cross correlation between Wanhua Chemical Group and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Wanhua Chemical and Maoming Petro-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 Wanhua Chemical with a short position of Maoming Petro-Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Maoming Petro-Chemical.
Diversification Opportunities for Wanhua Chemical and Maoming Petro-Chemical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wanhua and Maoming is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro 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 Maoming Petro-Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Maoming Petro-Chemical go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Maoming Petro-Chemical
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Maoming Petro-Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.4 times less risky than Maoming Petro-Chemical. The stock trades about -0.34 of its potential returns per unit of risk. The Maoming Petro Chemical Shihua is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Maoming Petro Chemical Shihua on January 23, 2025 and sell it today you would lose (9.00) from holding Maoming Petro Chemical Shihua or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Wanhua Chemical Group |
| Maoming Petro Chemical |
Wanhua Chemical and Maoming Petro-Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Maoming Petro-Chemical
The main advantage of trading using opposite Wanhua Chemical and Maoming Petro-Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Maoming Petro-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 Maoming Petro-Chemical will offset losses from the drop in Maoming Petro-Chemical's long position.| Wanhua Chemical vs. Montage Technology Co | Wanhua Chemical vs. Guangdong Xiongsu Technology | Wanhua Chemical vs. OBiO Technology Corp | Wanhua Chemical vs. Winner Information Technology |
| Maoming Petro-Chemical vs. Jinyu Bio Technology Co | Maoming Petro-Chemical vs. Shanghai Xinhua Media | Maoming Petro-Chemical vs. Shuhua Sports Co | Maoming Petro-Chemical vs. Ciwen Media 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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