Correlation Between Wanhua Chemical and Zhejiang HISUN
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By analyzing existing cross correlation between Wanhua Chemical Group and Zhejiang HISUN Biomaterials, you can compare the effects of market volatilities on Wanhua Chemical and Zhejiang HISUN 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 HISUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Zhejiang HISUN.
Diversification Opportunities for Wanhua Chemical and Zhejiang HISUN
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Zhejiang is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Zhejiang HISUN Biomaterials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang HISUN Bioma 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 HISUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang HISUN Bioma has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Zhejiang HISUN go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Zhejiang HISUN
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Zhejiang HISUN. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.25 times less risky than Zhejiang HISUN. The stock trades about -0.23 of its potential returns per unit of risk. The Zhejiang HISUN Biomaterials is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,089 in Zhejiang HISUN Biomaterials on September 12, 2024 and sell it today you would lose (6.00) from holding Zhejiang HISUN Biomaterials or give up 0.55% 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. Zhejiang HISUN Biomaterials
Performance |
| Timeline |
| Wanhua Chemical Group |
| Zhejiang HISUN Bioma |
Wanhua Chemical and Zhejiang HISUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Zhejiang HISUN
The main advantage of trading using opposite Wanhua Chemical and Zhejiang HISUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Zhejiang HISUN 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 HISUN will offset losses from the drop in Zhejiang HISUN'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 |
| Zhejiang HISUN vs. Nanjing Putian Telecommunications | Zhejiang HISUN vs. Eastern Communications Co | Zhejiang HISUN vs. Anhui Jianghuai Automobile | Zhejiang HISUN vs. China World Trade |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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