Correlation Between Wanhua Chemical and Shenzhen Noposion
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By analyzing existing cross correlation between Wanhua Chemical Group and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Wanhua Chemical and Shenzhen Noposion 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 Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shenzhen Noposion.
Diversification Opportunities for Wanhua Chemical and Shenzhen Noposion
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Shenzhen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion 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 Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shenzhen Noposion
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Shenzhen Noposion. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.09 times less risky than Shenzhen Noposion. The stock trades about -0.05 of its potential returns per unit of risk. The Shenzhen Noposion Agrochemicals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 797.00 in Shenzhen Noposion Agrochemicals on August 25, 2024 and sell it today you would earn a total of 152.00 from holding Shenzhen Noposion Agrochemicals or generate 19.07% 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. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shenzhen Noposion |
Wanhua Chemical and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shenzhen Noposion
The main advantage of trading using opposite Wanhua Chemical and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
| Shenzhen Noposion vs. Zijin Mining Group | Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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