Correlation Between Wanhua Chemical and Shandong Rike
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By analyzing existing cross correlation between Wanhua Chemical Group and Shandong Rike Chemical, you can compare the effects of market volatilities on Wanhua Chemical and Shandong Rike 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 Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Shandong Rike.
Diversification Opportunities for Wanhua Chemical and Shandong Rike
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Shandong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical 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 Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Shandong Rike go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Shandong Rike
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Shandong Rike. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 3.07 times less risky than Shandong Rike. The stock trades about -0.1 of its potential returns per unit of risk. The Shandong Rike Chemical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Shandong Rike Chemical on November 4, 2024 and sell it today you would lose (7.00) from holding Shandong Rike Chemical or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Shandong Rike Chemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| Shandong Rike Chemical |
Wanhua Chemical and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Shandong Rike
The main advantage of trading using opposite Wanhua Chemical and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Shandong Rike 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 Shandong Rike will offset losses from the drop in Shandong Rike's long position.| Wanhua Chemical vs. Jinhui Mining Co | Wanhua Chemical vs. Shenyang Chemical Industry | Wanhua Chemical vs. Hainan Mining Co | Wanhua Chemical vs. Dymatic Chemicals |
| Shandong Rike vs. GRG Banking Equipment | Shandong Rike vs. Industrial Bank Co | Shandong Rike vs. New Hope Dairy | Shandong Rike vs. Shanghai Ziyan Foods |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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