Correlation Between Wanhua Chemical and Puyang Huicheng
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By analyzing existing cross correlation between Wanhua Chemical Group and Puyang Huicheng Electronic, you can compare the effects of market volatilities on Wanhua Chemical and Puyang Huicheng 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 Puyang Huicheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Puyang Huicheng.
Diversification Opportunities for Wanhua Chemical and Puyang Huicheng
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Puyang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Puyang Huicheng Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puyang Huicheng Elec 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 Puyang Huicheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puyang Huicheng Elec has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Puyang Huicheng go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Puyang Huicheng
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Puyang Huicheng. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.56 times less risky than Puyang Huicheng. The stock trades about -0.07 of its potential returns per unit of risk. The Puyang Huicheng Electronic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Puyang Huicheng Electronic on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Puyang Huicheng Electronic or generate 0.27% 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. Puyang Huicheng Electronic
Performance |
| Timeline |
| Wanhua Chemical Group |
| Puyang Huicheng Elec |
Wanhua Chemical and Puyang Huicheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Puyang Huicheng
The main advantage of trading using opposite Wanhua Chemical and Puyang Huicheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Puyang Huicheng 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 Puyang Huicheng will offset losses from the drop in Puyang Huicheng's long position.| Wanhua Chemical vs. Shuhua Sports Co | Wanhua Chemical vs. Shanghai CEO Environmental | Wanhua Chemical vs. JCHX Mining Management | Wanhua Chemical vs. Dymatic Chemicals |
| Puyang Huicheng vs. Jointo Energy Investment | Puyang Huicheng vs. Zhongrun Resources Investment | Puyang Huicheng vs. Zhengzhou Coal Mining | Puyang Huicheng vs. Xinjiang Baodi 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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