Correlation Between Boai NKY and Wanhua Chemical
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By analyzing existing cross correlation between Boai NKY Pharmaceuticals and Wanhua Chemical Group, you can compare the effects of market volatilities on Boai NKY 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 Boai NKY with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boai NKY and Wanhua Chemical.
Diversification Opportunities for Boai NKY and Wanhua Chemical
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boai and Wanhua is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boai NKY Pharmaceuticals 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 Boai NKY 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 Boai NKY Pharmaceuticals 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 Boai NKY i.e., Boai NKY and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Boai NKY and Wanhua Chemical
Assuming the 90 days trading horizon Boai NKY Pharmaceuticals is expected to generate 2.15 times more return on investment than Wanhua Chemical. However, Boai NKY is 2.15 times more volatile than Wanhua Chemical Group. It trades about 0.22 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.14 per unit of risk. If you would invest 1,264 in Boai NKY Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 215.00 from holding Boai NKY Pharmaceuticals or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boai NKY Pharmaceuticals vs. Wanhua Chemical Group
Performance |
| Timeline |
| Boai NKY Pharmaceuticals |
| Wanhua Chemical Group |
Boai NKY and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boai NKY and Wanhua Chemical
The main advantage of trading using opposite Boai NKY and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boai NKY 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.| Boai NKY vs. Zijin Mining Group | Boai NKY vs. Wanhua Chemical Group | Boai NKY vs. Baoshan Iron Steel | Boai NKY vs. Rongsheng Petrochemical Co |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Shandong Gold Mining |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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