Correlation Between Wanhua Chemical and Boai NKY
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By analyzing existing cross correlation between Wanhua Chemical Group and Boai NKY Pharmaceuticals, you can compare the effects of market volatilities on Wanhua Chemical and Boai NKY 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 Boai NKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Boai NKY.
Diversification Opportunities for Wanhua Chemical and Boai NKY
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Boai is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Boai NKY Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boai NKY Pharmaceuticals 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 Boai NKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boai NKY Pharmaceuticals has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Boai NKY go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Boai NKY
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Boai NKY. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.24 times less risky than Boai NKY. The stock trades about -0.08 of its potential returns per unit of risk. The Boai NKY Pharmaceuticals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,264 in Boai NKY Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 215.00 from holding Boai NKY Pharmaceuticals or generate 17.01% 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. Boai NKY Pharmaceuticals
Performance |
| Timeline |
| Wanhua Chemical Group |
| Boai NKY Pharmaceuticals |
Wanhua Chemical and Boai NKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Boai NKY
The main advantage of trading using opposite Wanhua Chemical and Boai NKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Boai NKY 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 Boai NKY will offset losses from the drop in Boai NKY's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Shandong Gold Mining |
| Boai NKY vs. Zijin Mining Group | Boai NKY vs. Wanhua Chemical Group | Boai NKY vs. Baoshan Iron Steel | Boai NKY 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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