Correlation Between UE Furniture and Wanhua Chemical
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By analyzing existing cross correlation between UE Furniture Co and Wanhua Chemical Group, you can compare the effects of market volatilities on UE Furniture and Wanhua Chemical 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 UE Furniture with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Wanhua Chemical.
Diversification Opportunities for UE Furniture and Wanhua Chemical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 603600 and Wanhua is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture Co and Wanhua Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanhua Chemical Group and UE Furniture 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 UE Furniture Co are associated (or correlated) with Wanhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanhua Chemical Group has no effect on the direction of UE Furniture i.e., UE Furniture and Wanhua Chemical go up and down completely randomly.
Pair Corralation between UE Furniture and Wanhua Chemical
Assuming the 90 days trading horizon UE Furniture Co is expected to generate 0.97 times more return on investment than Wanhua Chemical. However, UE Furniture Co is 1.03 times less risky than Wanhua Chemical. It trades about 0.0 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.22 per unit of risk. If you would invest 1,161 in UE Furniture Co on August 31, 2024 and sell it today you would lose (11.00) from holding UE Furniture Co or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UE Furniture Co vs. Wanhua Chemical Group
Performance |
| Timeline |
| UE Furniture |
| Wanhua Chemical Group |
UE Furniture and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Wanhua Chemical
The main advantage of trading using opposite UE Furniture and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture position performs unexpectedly, Wanhua Chemical 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 Wanhua Chemical will offset losses from the drop in Wanhua Chemical's long position.| UE Furniture vs. State Grid InformationCommunication | UE Furniture vs. Dawning Information Industry | UE Furniture vs. Shenzhen SDG Information | UE Furniture vs. Digital China Information |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Hoshine Silicon Ind |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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