Correlation Between Wanhua Chemical and Shenyang Chemical
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By analyzing existing cross correlation between Wanhua Chemical Group and Shenyang Chemical Industry, you can compare the effects of market volatilities on Wanhua 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 Wanhua Chemical with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shenyang Chemical.
Diversification Opportunities for Wanhua Chemical and Shenyang Chemical
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wanhua and Shenyang is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang 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 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 Wanhua Chemical i.e., Wanhua Chemical and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shenyang Chemical
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.43 times more return on investment than Shenyang Chemical. However, Wanhua Chemical Group is 2.31 times less risky than Shenyang Chemical. It trades about -0.11 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.14 per unit of risk. If you would invest 7,300 in Wanhua Chemical Group on October 26, 2024 and sell it today you would lose (494.00) from holding Wanhua Chemical Group or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shenyang Chemical |
Wanhua Chemical and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shenyang Chemical
The main advantage of trading using opposite Wanhua Chemical and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua 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.| Wanhua Chemical vs. GuoChuang Software Co | Wanhua Chemical vs. ZYF Lopsking Aluminum | Wanhua Chemical vs. Guangdong Jingyi Metal | Wanhua Chemical vs. Digiwin Software Co |
| Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Wanhua Chemical Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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