Correlation Between Wanhua Chemical and Sichuan Yahua
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By analyzing existing cross correlation between Wanhua Chemical Group and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Wanhua Chemical and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Sichuan Yahua.
Diversification Opportunities for Wanhua Chemical and Sichuan Yahua
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Sichuan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Sichuan Yahua
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Sichuan Yahua. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.36 times less risky than Sichuan Yahua. The stock trades about -0.05 of its potential returns per unit of risk. The Sichuan Yahua Industrial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 875.00 in Sichuan Yahua Industrial on August 25, 2024 and sell it today you would earn a total of 339.00 from holding Sichuan Yahua Industrial or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Sichuan Yahua Industrial
Performance |
| Timeline |
| Wanhua Chemical Group |
| Sichuan Yahua Industrial |
Wanhua Chemical and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Sichuan Yahua
The main advantage of trading using opposite Wanhua Chemical and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
| Sichuan Yahua vs. Changchun UP Optotech | Sichuan Yahua vs. Anhui Deli Household | Sichuan Yahua vs. Kangping Technology Co | Sichuan Yahua vs. CGN Nuclear Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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