Correlation Between Wanhua Chemical and Suzhou Xingye
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By analyzing existing cross correlation between Wanhua Chemical Group and Suzhou Xingye Material, you can compare the effects of market volatilities on Wanhua Chemical and Suzhou Xingye 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 Suzhou Xingye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Suzhou Xingye.
Diversification Opportunities for Wanhua Chemical and Suzhou Xingye
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Suzhou is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Suzhou Xingye Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Xingye 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 Suzhou Xingye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Xingye Material has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Suzhou Xingye go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Suzhou Xingye
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Suzhou Xingye. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.55 times less risky than Suzhou Xingye. The stock trades about -0.07 of its potential returns per unit of risk. The Suzhou Xingye Material is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,128 in Suzhou Xingye Material on August 25, 2024 and sell it today you would lose (233.00) from holding Suzhou Xingye Material or give up 20.66% 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. Suzhou Xingye Material
Performance |
| Timeline |
| Wanhua Chemical Group |
| Suzhou Xingye Material |
Wanhua Chemical and Suzhou Xingye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Suzhou Xingye
The main advantage of trading using opposite Wanhua Chemical and Suzhou Xingye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Suzhou Xingye 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 Suzhou Xingye will offset losses from the drop in Suzhou Xingye's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
| Suzhou Xingye vs. Zijin Mining Group | Suzhou Xingye vs. Wanhua Chemical Group | Suzhou Xingye vs. Baoshan Iron Steel | Suzhou Xingye 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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