Correlation Between Wanhua Chemical and Sanxiang Advanced
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By analyzing existing cross correlation between Wanhua Chemical Group and Sanxiang Advanced Materials, you can compare the effects of market volatilities on Wanhua Chemical and Sanxiang Advanced 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 Sanxiang Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Sanxiang Advanced.
Diversification Opportunities for Wanhua Chemical and Sanxiang Advanced
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Sanxiang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Sanxiang Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanxiang Advanced 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 Sanxiang Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanxiang Advanced has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Sanxiang Advanced go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Sanxiang Advanced
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Sanxiang Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.72 times less risky than Sanxiang Advanced. The stock trades about -0.14 of its potential returns per unit of risk. The Sanxiang Advanced Materials is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,713 in Sanxiang Advanced Materials on October 30, 2024 and sell it today you would lose (6.00) from holding Sanxiang Advanced Materials or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Sanxiang Advanced Materials
Performance |
| Timeline |
| Wanhua Chemical Group |
| Sanxiang Advanced |
Wanhua Chemical and Sanxiang Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Sanxiang Advanced
The main advantage of trading using opposite Wanhua Chemical and Sanxiang Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Sanxiang Advanced 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 Sanxiang Advanced will offset losses from the drop in Sanxiang Advanced's long position.| Wanhua Chemical vs. Citic Guoan Wine | Wanhua Chemical vs. Chengtun Mining Group | Wanhua Chemical vs. Pengxin International Mining | Wanhua Chemical vs. Tianjin Silvery Dragon |
| Sanxiang Advanced vs. Zijin Mining Group | Sanxiang Advanced vs. Wanhua Chemical Group | Sanxiang Advanced vs. Baoshan Iron Steel | Sanxiang Advanced 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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