Correlation Between Zhejiang Huayou and Wanhua Chemical
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By analyzing existing cross correlation between Zhejiang Huayou Cobalt and Wanhua Chemical Group, you can compare the effects of market volatilities on Zhejiang Huayou 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 Zhejiang Huayou with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Huayou and Wanhua Chemical.
Diversification Opportunities for Zhejiang Huayou and Wanhua Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Wanhua is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Huayou Cobalt 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 Zhejiang Huayou 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 Zhejiang Huayou Cobalt 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 Zhejiang Huayou i.e., Zhejiang Huayou and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Zhejiang Huayou and Wanhua Chemical
Assuming the 90 days trading horizon Zhejiang Huayou Cobalt is expected to under-perform the Wanhua Chemical. In addition to that, Zhejiang Huayou is 1.18 times more volatile than Wanhua Chemical Group. It trades about -0.15 of its total potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.14 per unit of volatility. If you would invest 7,429 in Wanhua Chemical Group on October 30, 2024 and sell it today you would lose (576.00) from holding Wanhua Chemical Group or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Huayou Cobalt vs. Wanhua Chemical Group
Performance |
| Timeline |
| Zhejiang Huayou Cobalt |
| Wanhua Chemical Group |
Zhejiang Huayou and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Huayou and Wanhua Chemical
The main advantage of trading using opposite Zhejiang Huayou and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Huayou 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.| Zhejiang Huayou vs. Zijin Mining Group | Zhejiang Huayou vs. Wanhua Chemical Group | Zhejiang Huayou vs. Baoshan Iron Steel | Zhejiang Huayou vs. Shandong Gold Mining |
| Wanhua Chemical vs. Citic Guoan Wine | Wanhua Chemical vs. Chengtun Mining Group | Wanhua Chemical vs. Pengxin International Mining | Wanhua Chemical vs. Tianjin Silvery Dragon |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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