Correlation Between Wanhua Chemical and Cofco Biochemical
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By analyzing existing cross correlation between Wanhua Chemical Group and Cofco Biochemical Anhui, you can compare the effects of market volatilities on Wanhua Chemical and Cofco Biochemical 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 Cofco Biochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Cofco Biochemical.
Diversification Opportunities for Wanhua Chemical and Cofco Biochemical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Cofco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Cofco Biochemical Anhui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofco Biochemical Anhui 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 Cofco Biochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofco Biochemical Anhui has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Cofco Biochemical go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Cofco Biochemical
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Cofco Biochemical. In addition to that, Wanhua Chemical is 1.09 times more volatile than Cofco Biochemical Anhui. It trades about -0.27 of its total potential returns per unit of risk. Cofco Biochemical Anhui is currently generating about -0.04 per unit of volatility. If you would invest 604.00 in Cofco Biochemical Anhui on September 12, 2024 and sell it today you would lose (7.00) from holding Cofco Biochemical Anhui or give up 1.16% 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. Cofco Biochemical Anhui
Performance |
| Timeline |
| Wanhua Chemical Group |
| Cofco Biochemical Anhui |
Wanhua Chemical and Cofco Biochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Cofco Biochemical
The main advantage of trading using opposite Wanhua Chemical and Cofco Biochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Cofco Biochemical 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 Cofco Biochemical will offset losses from the drop in Cofco Biochemical's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Hoshine Silicon Ind |
| Cofco Biochemical vs. Zijin Mining Group | Cofco Biochemical vs. Wanhua Chemical Group | Cofco Biochemical vs. Baoshan Iron Steel | Cofco Biochemical vs. Rongsheng Petrochemical Co |
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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