Correlation Between Shenzhen Glory and Wanhua Chemical
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By analyzing existing cross correlation between Shenzhen Glory Medical and Wanhua Chemical Group, you can compare the effects of market volatilities on Shenzhen Glory 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 Shenzhen Glory with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Wanhua Chemical.
Diversification Opportunities for Shenzhen Glory and Wanhua Chemical
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenzhen and Wanhua is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical 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 Shenzhen Glory 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 Shenzhen Glory Medical 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 Shenzhen Glory i.e., Shenzhen Glory and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Wanhua Chemical
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to under-perform the Wanhua Chemical. In addition to that, Shenzhen Glory is 1.54 times more volatile than Wanhua Chemical Group. It trades about -0.01 of its total potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.02 per unit of volatility. If you would invest 9,070 in Wanhua Chemical Group on September 23, 2024 and sell it today you would lose (1,701) from holding Wanhua Chemical Group or give up 18.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Glory Medical vs. Wanhua Chemical Group
Performance |
Timeline |
Shenzhen Glory Medical |
Wanhua Chemical Group |
Shenzhen Glory and Wanhua Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Glory and Wanhua Chemical
The main advantage of trading using opposite Shenzhen Glory and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory 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.Shenzhen Glory vs. Jiangsu Xinri E Vehicle | Shenzhen Glory vs. Shenzhen Noposion Agrochemicals | Shenzhen Glory vs. Dymatic Chemicals | Shenzhen Glory vs. CIMC Vehicles Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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