Correlation Between Wanhua Chemical and Hubei Forbon
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By analyzing existing cross correlation between Wanhua Chemical Group and Hubei Forbon Technology, you can compare the effects of market volatilities on Wanhua Chemical and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Hubei Forbon.
Diversification Opportunities for Wanhua Chemical and Hubei Forbon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Hubei is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Hubei Forbon go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Hubei Forbon
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Hubei Forbon. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.07 times less risky than Hubei Forbon. The stock trades about -0.28 of its potential returns per unit of risk. The Hubei Forbon Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 802.00 in Hubei Forbon Technology on October 26, 2024 and sell it today you would earn a total of 18.00 from holding Hubei Forbon Technology or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Hubei Forbon Technology
Performance |
| Timeline |
| Wanhua Chemical Group |
| Hubei Forbon Technology |
Wanhua Chemical and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Hubei Forbon
The main advantage of trading using opposite Wanhua Chemical and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon'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 |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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