Correlation Between Wanhua Chemical and Guangzhou Jointas
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By analyzing existing cross correlation between Wanhua Chemical Group and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Wanhua Chemical and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Guangzhou Jointas.
Diversification Opportunities for Wanhua Chemical and Guangzhou Jointas
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wanhua and Guangzhou is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Guangzhou Jointas
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Guangzhou Jointas. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.93 times less risky than Guangzhou Jointas. The stock trades about -0.27 of its potential returns per unit of risk. The Guangzhou Jointas Chemical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 509.00 in Guangzhou Jointas Chemical on October 29, 2024 and sell it today you would earn a total of 15.00 from holding Guangzhou Jointas Chemical or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| Guangzhou Jointas |
Wanhua Chemical and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Guangzhou Jointas
The main advantage of trading using opposite Wanhua Chemical and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.| Wanhua Chemical vs. Anhui Fuhuang Steel | Wanhua Chemical vs. BrightGene Bio Medical | Wanhua Chemical vs. Hangzhou Guotai Environmental | Wanhua Chemical vs. Fujian Nanwang Environment |
| Guangzhou Jointas vs. Jiangyin Jianghua Microelectronics | Guangzhou Jointas vs. Weihai Honglin Electronic | Guangzhou Jointas vs. Lontium Semiconductor Corp | Guangzhou Jointas vs. Nexchip Semiconductor Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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