Correlation Between Wanhua Chemical and Do Fluoride
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By analyzing existing cross correlation between Wanhua Chemical Group and Do Fluoride Chemicals Co, you can compare the effects of market volatilities on Wanhua Chemical and Do Fluoride 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 Do Fluoride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Do Fluoride.
Diversification Opportunities for Wanhua Chemical and Do Fluoride
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and 002407 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Do Fluoride Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Do Fluoride Chemicals 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 Do Fluoride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Do Fluoride Chemicals has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Do Fluoride go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Do Fluoride
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Do Fluoride. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.35 times less risky than Do Fluoride. The stock trades about -0.12 of its potential returns per unit of risk. The Do Fluoride Chemicals Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,215 in Do Fluoride Chemicals Co on September 3, 2024 and sell it today you would earn a total of 110.00 from holding Do Fluoride Chemicals Co or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Do Fluoride Chemicals Co
Performance |
| Timeline |
| Wanhua Chemical Group |
| Do Fluoride Chemicals |
Wanhua Chemical and Do Fluoride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Do Fluoride
The main advantage of trading using opposite Wanhua Chemical and Do Fluoride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Do Fluoride 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 Do Fluoride will offset losses from the drop in Do Fluoride'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 |
| Do Fluoride vs. Zijin Mining Group | Do Fluoride vs. Baoshan Iron Steel | Do Fluoride vs. Rongsheng Petrochemical Co | Do Fluoride vs. Hoshine Silicon Ind |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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