Correlation Between Wanhua Chemical and Zhejiang Huayou
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By analyzing existing cross correlation between Wanhua Chemical Group and Zhejiang Huayou Cobalt, you can compare the effects of market volatilities on Wanhua Chemical and Zhejiang Huayou 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 Zhejiang Huayou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Zhejiang Huayou.
Diversification Opportunities for Wanhua Chemical and Zhejiang Huayou
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Zhejiang is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Zhejiang Huayou Cobalt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huayou Cobalt 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 Zhejiang Huayou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huayou Cobalt has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Zhejiang Huayou go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Zhejiang Huayou
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.64 times more return on investment than Zhejiang Huayou. However, Wanhua Chemical Group is 1.57 times less risky than Zhejiang Huayou. It trades about -0.04 of its potential returns per unit of risk. Zhejiang Huayou Cobalt is currently generating about -0.05 per unit of risk. If you would invest 9,606 in Wanhua Chemical Group on October 16, 2024 and sell it today you would lose (2,937) from holding Wanhua Chemical Group or give up 30.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Zhejiang Huayou Cobalt
Performance |
| Timeline |
| Wanhua Chemical Group |
| Zhejiang Huayou Cobalt |
Wanhua Chemical and Zhejiang Huayou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Zhejiang Huayou
The main advantage of trading using opposite Wanhua Chemical and Zhejiang Huayou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Zhejiang Huayou 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 Zhejiang Huayou will offset losses from the drop in Zhejiang Huayou's long position.| Wanhua Chemical vs. Xiamen Jihong Package | Wanhua Chemical vs. Shandong Sanyuan Biotechnology | Wanhua Chemical vs. Shanghai Rightongene Biotechnology | Wanhua Chemical vs. Xiwang Foodstuffs Co |
| Zhejiang Huayou vs. Zijin Mining Group | Zhejiang Huayou vs. Wanhua Chemical Group | Zhejiang Huayou vs. Baoshan Iron Steel | Zhejiang Huayou 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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