Correlation Between Hengli Petrochemical and Vatti Corp
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By analyzing existing cross correlation between Hengli Petrochemical Co and Vatti Corp, you can compare the effects of market volatilities on Hengli Petrochemical and Vatti Corp 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 Hengli Petrochemical with a short position of Vatti Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Vatti Corp.
Diversification Opportunities for Hengli Petrochemical and Vatti Corp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hengli and Vatti is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Vatti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vatti Corp and Hengli Petrochemical 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 Hengli Petrochemical Co are associated (or correlated) with Vatti Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vatti Corp has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Vatti Corp go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Vatti Corp
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.36 times more return on investment than Vatti Corp. However, Hengli Petrochemical Co is 2.78 times less risky than Vatti Corp. It trades about -0.12 of its potential returns per unit of risk. Vatti Corp is currently generating about -0.07 per unit of risk. If you would invest 1,535 in Hengli Petrochemical Co on November 1, 2024 and sell it today you would lose (37.00) from holding Hengli Petrochemical Co or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. Vatti Corp
Performance |
| Timeline |
| Hengli Petrochemical |
| Vatti Corp |
Hengli Petrochemical and Vatti Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Vatti Corp
The main advantage of trading using opposite Hengli Petrochemical and Vatti Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Vatti Corp 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 Vatti Corp will offset losses from the drop in Vatti Corp's long position.| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
| Vatti Corp vs. Shandong Rike Chemical | Vatti Corp vs. Xinxiang Chemical Fiber | Vatti Corp vs. Dymatic Chemicals | Vatti Corp vs. Hengli Petrochemical Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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