Correlation Between Wanhua Chemical and Anhui Huilong
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By analyzing existing cross correlation between Wanhua Chemical Group and Anhui Huilong Agricultural, you can compare the effects of market volatilities on Wanhua Chemical and Anhui Huilong 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 Anhui Huilong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Anhui Huilong.
Diversification Opportunities for Wanhua Chemical and Anhui Huilong
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Anhui is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Anhui Huilong Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huilong Agricu 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 Anhui Huilong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huilong Agricu has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Anhui Huilong go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Anhui Huilong
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.75 times more return on investment than Anhui Huilong. However, Wanhua Chemical Group is 1.34 times less risky than Anhui Huilong. It trades about -0.27 of its potential returns per unit of risk. Anhui Huilong Agricultural is currently generating about -0.2 per unit of risk. If you would invest 7,299 in Wanhua Chemical Group on October 28, 2024 and sell it today you would lose (501.00) from holding Wanhua Chemical Group or give up 6.86% 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. Anhui Huilong Agricultural
Performance |
| Timeline |
| Wanhua Chemical Group |
| Anhui Huilong Agricu |
Wanhua Chemical and Anhui Huilong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Anhui Huilong
The main advantage of trading using opposite Wanhua Chemical and Anhui Huilong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Anhui Huilong 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 Anhui Huilong will offset losses from the drop in Anhui Huilong's long position.| Wanhua Chemical vs. Healthcare Co | Wanhua Chemical vs. Dezhan HealthCare Co | Wanhua Chemical vs. XinJiang GuoTong Pipeline | Wanhua Chemical vs. Anhui Huaren Health |
| Anhui Huilong vs. Zijin Mining Group | Anhui Huilong vs. Wanhua Chemical Group | Anhui Huilong vs. Baoshan Iron Steel | Anhui Huilong 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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