Correlation Between Wanhua Chemical and Shengtak New
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By analyzing existing cross correlation between Wanhua Chemical Group and Shengtak New Material, you can compare the effects of market volatilities on Wanhua Chemical and Shengtak New 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 Shengtak New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shengtak New.
Diversification Opportunities for Wanhua Chemical and Shengtak New
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Shengtak is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shengtak New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengtak New Material 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 Shengtak New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengtak New Material has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Shengtak New go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shengtak New
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.87 times more return on investment than Shengtak New. However, Wanhua Chemical Group is 1.15 times less risky than Shengtak New. It trades about -0.06 of its potential returns per unit of risk. Shengtak New Material is currently generating about -0.05 per unit of risk. If you would invest 7,448 in Wanhua Chemical Group on September 28, 2024 and sell it today you would lose (140.00) from holding Wanhua Chemical Group or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Shengtak New Material
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shengtak New Material |
Wanhua Chemical and Shengtak New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shengtak New
The main advantage of trading using opposite Wanhua Chemical and Shengtak New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Shengtak New 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 Shengtak New will offset losses from the drop in Shengtak New's long position.| Wanhua Chemical vs. Northern United Publishing | Wanhua Chemical vs. Xinhua Winshare Publishing | Wanhua Chemical vs. Tonghua Grape Wine | Wanhua Chemical vs. Duzhe Publishing Media |
| Shengtak New vs. Peoples Insurance of | Shengtak New vs. Anhui Deli Household | Shengtak New vs. Harvest Fund Management | Shengtak New vs. Marssenger Kitchenware Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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