Correlation Between Hangzhou Huawang and Wanhua Chemical
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By analyzing existing cross correlation between Hangzhou Huawang New and Wanhua Chemical Group, you can compare the effects of market volatilities on Hangzhou Huawang 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 Hangzhou Huawang with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Huawang and Wanhua Chemical.
Diversification Opportunities for Hangzhou Huawang and Wanhua Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Wanhua is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Huawang New 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 Hangzhou Huawang 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 Hangzhou Huawang New 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 Hangzhou Huawang i.e., Hangzhou Huawang and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Hangzhou Huawang and Wanhua Chemical
Assuming the 90 days trading horizon Hangzhou Huawang New is expected to generate 1.1 times more return on investment than Wanhua Chemical. However, Hangzhou Huawang is 1.1 times more volatile than Wanhua Chemical Group. It trades about 0.09 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.03 per unit of risk. If you would invest 1,222 in Hangzhou Huawang New on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Hangzhou Huawang New or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hangzhou Huawang New vs. Wanhua Chemical Group
Performance |
| Timeline |
| Hangzhou Huawang New |
| Wanhua Chemical Group |
Hangzhou Huawang and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Huawang and Wanhua Chemical
The main advantage of trading using opposite Hangzhou Huawang and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Huawang 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.| Hangzhou Huawang vs. Zijin Mining Group | Hangzhou Huawang vs. Wanhua Chemical Group | Hangzhou Huawang vs. Baoshan Iron Steel | Hangzhou Huawang vs. Shandong Gold Mining |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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