Correlation Between Wanhua Chemical and Inner Mongolia
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By analyzing existing cross correlation between Wanhua Chemical Group and Inner Mongolia Yuan, you can compare the effects of market volatilities on Wanhua Chemical and Inner Mongolia 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 Wanhua Chemical with a short position of Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Inner Mongolia.
Diversification Opportunities for Wanhua Chemical and Inner Mongolia
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Inner is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Inner Mongolia Yuan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Yuan and Wanhua Chemical 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 Wanhua Chemical Group are associated (or correlated) with Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Yuan has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Inner Mongolia go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Inner Mongolia
Assuming the 90 days trading horizon Wanhua Chemical is expected to generate 3.22 times less return on investment than Inner Mongolia. But when comparing it to its historical volatility, Wanhua Chemical Group is 1.32 times less risky than Inner Mongolia. It trades about 0.01 of its potential returns per unit of risk. Inner Mongolia Yuan is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 557.00 in Inner Mongolia Yuan on September 14, 2024 and sell it today you would earn a total of 51.00 from holding Inner Mongolia Yuan or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Inner Mongolia Yuan
Performance |
| Timeline |
| Wanhua Chemical Group |
| Inner Mongolia Yuan |
Wanhua Chemical and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Inner Mongolia
The main advantage of trading using opposite Wanhua Chemical and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| Wanhua Chemical vs. Jiangsu Yueda Investment | Wanhua Chemical vs. Jointo Energy Investment | Wanhua Chemical vs. Meinian Onehealth Healthcare | Wanhua Chemical vs. Yunnan Jianzhijia Health Chain |
| Inner Mongolia vs. Kontour Medical Technology | Inner Mongolia vs. Chison Medical Technologies | Inner Mongolia vs. De Rucci Healthy | Inner Mongolia vs. Lotus Health Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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