Correlation Between Wanhua Chemical and China Minmetals
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By analyzing existing cross correlation between Wanhua Chemical Group and China Minmetals Rare, you can compare the effects of market volatilities on Wanhua Chemical and China Minmetals 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 China Minmetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and China Minmetals.
Diversification Opportunities for Wanhua Chemical and China Minmetals
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and China Minmetals Rare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minmetals Rare 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 China Minmetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minmetals Rare has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and China Minmetals go up and down completely randomly.
Pair Corralation between Wanhua Chemical and China Minmetals
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.49 times more return on investment than China Minmetals. However, Wanhua Chemical Group is 2.03 times less risky than China Minmetals. It trades about -0.12 of its potential returns per unit of risk. China Minmetals Rare is currently generating about -0.13 per unit of risk. If you would invest 7,733 in Wanhua Chemical Group on September 3, 2024 and sell it today you would lose (304.00) from holding Wanhua Chemical Group or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. China Minmetals Rare
Performance |
| Timeline |
| Wanhua Chemical Group |
| China Minmetals Rare |
Wanhua Chemical and China Minmetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and China Minmetals
The main advantage of trading using opposite Wanhua Chemical and China Minmetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, China Minmetals 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 China Minmetals will offset losses from the drop in China Minmetals' long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Hoshine Silicon Ind |
| China Minmetals vs. China Resources Microelectronics | China Minmetals vs. China Mobile Limited | China Minmetals vs. China National Electric | China Minmetals vs. China International Travel |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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