Correlation Between Anhui Fuhuang and Wanhua Chemical
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By analyzing existing cross correlation between Anhui Fuhuang Steel and Wanhua Chemical Group, you can compare the effects of market volatilities on Anhui Fuhuang 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 Anhui Fuhuang with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and Wanhua Chemical.
Diversification Opportunities for Anhui Fuhuang and Wanhua Chemical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anhui and Wanhua is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel 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 Anhui Fuhuang 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 Anhui Fuhuang Steel 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 Anhui Fuhuang i.e., Anhui Fuhuang and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and Wanhua Chemical
Assuming the 90 days trading horizon Anhui Fuhuang Steel is expected to under-perform the Wanhua Chemical. In addition to that, Anhui Fuhuang is 3.31 times more volatile than Wanhua Chemical Group. It trades about -0.19 of its total potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.22 per unit of volatility. If you would invest 7,285 in Wanhua Chemical Group on October 29, 2024 and sell it today you would lose (432.00) from holding Wanhua Chemical Group or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. Wanhua Chemical Group
Performance |
| Timeline |
| Anhui Fuhuang Steel |
| Wanhua Chemical Group |
Anhui Fuhuang and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and Wanhua Chemical
The main advantage of trading using opposite Anhui Fuhuang and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang 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.| Anhui Fuhuang vs. Zijin Mining Group | Anhui Fuhuang vs. Wanhua Chemical Group | Anhui Fuhuang vs. Baoshan Iron Steel | Anhui Fuhuang vs. Shandong Gold Mining |
| Wanhua Chemical vs. Anhui Fuhuang Steel | Wanhua Chemical vs. BrightGene Bio Medical | Wanhua Chemical vs. Hangzhou Guotai Environmental | Wanhua Chemical vs. Fujian Nanwang Environment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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