Correlation Between Wanhua Chemical and Cngr Advanced
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By analyzing existing cross correlation between Wanhua Chemical Group and Cngr Advanced Material, you can compare the effects of market volatilities on Wanhua Chemical and Cngr Advanced 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 Cngr Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Cngr Advanced.
Diversification Opportunities for Wanhua Chemical and Cngr Advanced
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Cngr is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Cngr Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cngr Advanced Material 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 Cngr Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cngr Advanced Material has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Cngr Advanced go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Cngr Advanced
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Cngr Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.27 times less risky than Cngr Advanced. The stock trades about -0.23 of its potential returns per unit of risk. The Cngr Advanced Material is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,004 in Cngr Advanced Material on August 29, 2024 and sell it today you would lose (108.00) from holding Cngr Advanced Material or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Cngr Advanced Material
Performance |
| Timeline |
| Wanhua Chemical Group |
| Cngr Advanced Material |
Wanhua Chemical and Cngr Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Cngr Advanced
The main advantage of trading using opposite Wanhua Chemical and Cngr Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Cngr Advanced 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 Cngr Advanced will offset losses from the drop in Cngr Advanced's long position.| Wanhua Chemical vs. Chongqing Changan Automobile | Wanhua Chemical vs. Guangdong Shenglu Telecommunication | Wanhua Chemical vs. Tongyu Communication | Wanhua Chemical vs. Sinomach Automobile Co |
| Cngr Advanced vs. Zijin Mining Group | Cngr Advanced vs. Baoshan Iron Steel | Cngr Advanced vs. Shandong Gold Mining | Cngr Advanced 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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