Correlation Between Hubei Dinglong and Wanhua Chemical
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By analyzing existing cross correlation between Hubei Dinglong Chemical and Wanhua Chemical Group, you can compare the effects of market volatilities on Hubei Dinglong 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 Hubei Dinglong with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and Wanhua Chemical.
Diversification Opportunities for Hubei Dinglong and Wanhua Chemical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Wanhua is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical 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 Hubei Dinglong 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 Hubei Dinglong Chemical 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 Hubei Dinglong i.e., Hubei Dinglong and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Hubei Dinglong and Wanhua Chemical
Assuming the 90 days trading horizon Hubei Dinglong Chemical is expected to generate 1.77 times more return on investment than Wanhua Chemical. However, Hubei Dinglong is 1.77 times more volatile than Wanhua Chemical Group. It trades about -0.03 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.23 per unit of risk. If you would invest 2,734 in Hubei Dinglong Chemical on August 29, 2024 and sell it today you would lose (75.00) from holding Hubei Dinglong Chemical or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. Wanhua Chemical Group
Performance |
| Timeline |
| Hubei Dinglong Chemical |
| Wanhua Chemical Group |
Hubei Dinglong and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and Wanhua Chemical
The main advantage of trading using opposite Hubei Dinglong and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong 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.| Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical Co | Hubei Dinglong vs. Inner Mongolia BaoTou |
| Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Inner Mongolia BaoTou |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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