Correlation Between Wanhua Chemical and Elite Color
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By analyzing existing cross correlation between Wanhua Chemical Group and Elite Color Environmental, you can compare the effects of market volatilities on Wanhua Chemical and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Elite Color.
Diversification Opportunities for Wanhua Chemical and Elite Color
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Elite is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Elite Color go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Elite Color
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Elite Color. In addition to that, Wanhua Chemical is 1.04 times more volatile than Elite Color Environmental. It trades about -0.05 of its total potential returns per unit of risk. Elite Color Environmental is currently generating about 0.24 per unit of volatility. If you would invest 518.00 in Elite Color Environmental on August 25, 2024 and sell it today you would earn a total of 144.00 from holding Elite Color Environmental or generate 27.8% 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. Elite Color Environmental
Performance |
| Timeline |
| Wanhua Chemical Group |
| Elite Color Environmental |
Wanhua Chemical and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Elite Color
The main advantage of trading using opposite Wanhua Chemical and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color'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 |
| Elite Color vs. Zijin Mining Group | Elite Color vs. Wanhua Chemical Group | Elite Color vs. Baoshan Iron Steel | Elite Color 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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