Correlation Between Chahua Modern and Wanhua Chemical
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By analyzing existing cross correlation between Chahua Modern Housewares and Wanhua Chemical Group, you can compare the effects of market volatilities on Chahua Modern 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 Chahua Modern with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Wanhua Chemical.
Diversification Opportunities for Chahua Modern and Wanhua Chemical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chahua and Wanhua is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares 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 Chahua Modern 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 Chahua Modern Housewares 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 Chahua Modern i.e., Chahua Modern and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Chahua Modern and Wanhua Chemical
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 2.88 times more return on investment than Wanhua Chemical. However, Chahua Modern is 2.88 times more volatile than Wanhua Chemical Group. It trades about 0.16 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.08 per unit of risk. If you would invest 1,889 in Chahua Modern Housewares on September 5, 2024 and sell it today you would earn a total of 271.00 from holding Chahua Modern Housewares or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Wanhua Chemical Group
Performance |
| Timeline |
| Chahua Modern Housewares |
| Wanhua Chemical Group |
Chahua Modern and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Wanhua Chemical
The main advantage of trading using opposite Chahua Modern and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern 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.| Chahua Modern vs. Quectel Wireless Solutions | Chahua Modern vs. Hubeiyichang Transportation Group | Chahua Modern vs. Hainan Airlines Co | Chahua Modern vs. Heilongjiang Transport Development |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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