Correlation Between Wanhua Chemical and Shaanxi Beiyuan
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By analyzing existing cross correlation between Wanhua Chemical Group and Shaanxi Beiyuan Chemical, you can compare the effects of market volatilities on Wanhua Chemical and Shaanxi Beiyuan 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 Shaanxi Beiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shaanxi Beiyuan.
Diversification Opportunities for Wanhua Chemical and Shaanxi Beiyuan
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wanhua and Shaanxi is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shaanxi Beiyuan Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Beiyuan Chemical 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 Shaanxi Beiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Beiyuan Chemical has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Shaanxi Beiyuan go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shaanxi Beiyuan
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Shaanxi Beiyuan. In addition to that, Wanhua Chemical is 1.09 times more volatile than Shaanxi Beiyuan Chemical. It trades about -0.23 of its total potential returns per unit of risk. Shaanxi Beiyuan Chemical is currently generating about 0.14 per unit of volatility. If you would invest 439.00 in Shaanxi Beiyuan Chemical on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Shaanxi Beiyuan Chemical or generate 4.1% 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. Shaanxi Beiyuan Chemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shaanxi Beiyuan Chemical |
Wanhua Chemical and Shaanxi Beiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shaanxi Beiyuan
The main advantage of trading using opposite Wanhua Chemical and Shaanxi Beiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Shaanxi Beiyuan 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 Shaanxi Beiyuan will offset losses from the drop in Shaanxi Beiyuan's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Hoshine Silicon Ind |
| Shaanxi Beiyuan vs. HUAQIN TECHNOLOGY LTD | Shaanxi Beiyuan vs. Jinhe Biotechnology Co | Shaanxi Beiyuan vs. Shaanxi Energy Investment | Shaanxi Beiyuan vs. Zhejiang Construction Investment |
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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