Correlation Between Wanhua Chemical and Huaibei Mining
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By analyzing existing cross correlation between Wanhua Chemical Group and Huaibei Mining Holdings, you can compare the effects of market volatilities on Wanhua Chemical and Huaibei Mining 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 Huaibei Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Huaibei Mining.
Diversification Opportunities for Wanhua Chemical and Huaibei Mining
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wanhua and Huaibei is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Huaibei Mining Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaibei Mining Holdings 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 Huaibei Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaibei Mining Holdings has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Huaibei Mining go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Huaibei Mining
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Huaibei Mining. In addition to that, Wanhua Chemical is 1.21 times more volatile than Huaibei Mining Holdings. It trades about -0.13 of its total potential returns per unit of risk. Huaibei Mining Holdings is currently generating about -0.07 per unit of volatility. If you would invest 1,536 in Huaibei Mining Holdings on September 14, 2024 and sell it today you would lose (32.00) from holding Huaibei Mining Holdings or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Huaibei Mining Holdings
Performance |
| Timeline |
| Wanhua Chemical Group |
| Huaibei Mining Holdings |
Wanhua Chemical and Huaibei Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Huaibei Mining
The main advantage of trading using opposite Wanhua Chemical and Huaibei Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Huaibei Mining 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 Huaibei Mining will offset losses from the drop in Huaibei Mining's long position.| Wanhua Chemical vs. Jiangsu Yueda Investment | Wanhua Chemical vs. Jointo Energy Investment | Wanhua Chemical vs. Meinian Onehealth Healthcare | Wanhua Chemical vs. Yunnan Jianzhijia Health Chain |
| Huaibei Mining vs. Impulse Qingdao Health | Huaibei Mining vs. Lotus Health Group | Huaibei Mining vs. Shanxi Lanhua Sci Tech | Huaibei Mining vs. Yuan Longping High tech |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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