Correlation Between Wanhua Chemical and Shanghai Yaohua
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By analyzing existing cross correlation between Wanhua Chemical Group and Shanghai Yaohua Pilkington, you can compare the effects of market volatilities on Wanhua Chemical and Shanghai Yaohua 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 Shanghai Yaohua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shanghai Yaohua.
Diversification Opportunities for Wanhua Chemical and Shanghai Yaohua
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Shanghai is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shanghai Yaohua Pilkington in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaohua Pilk 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 Shanghai Yaohua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaohua Pilk has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Shanghai Yaohua go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shanghai Yaohua
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Shanghai Yaohua. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.27 times less risky than Shanghai Yaohua. The stock trades about -0.08 of its potential returns per unit of risk. The Shanghai Yaohua Pilkington is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Shanghai Yaohua Pilkington on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Shanghai Yaohua Pilkington or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Shanghai Yaohua Pilkington
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shanghai Yaohua Pilk |
Wanhua Chemical and Shanghai Yaohua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shanghai Yaohua
The main advantage of trading using opposite Wanhua Chemical and Shanghai Yaohua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Shanghai Yaohua 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 Shanghai Yaohua will offset losses from the drop in Shanghai Yaohua'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 |
| Shanghai Yaohua vs. Zijin Mining Group | Shanghai Yaohua vs. Wanhua Chemical Group | Shanghai Yaohua vs. Baoshan Iron Steel | Shanghai Yaohua 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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