Correlation Between Wanhua Chemical and Jiujiang Shanshui
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By analyzing existing cross correlation between Wanhua Chemical Group and Jiujiang Shanshui Technology, you can compare the effects of market volatilities on Wanhua Chemical and Jiujiang Shanshui 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 Jiujiang Shanshui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Jiujiang Shanshui.
Diversification Opportunities for Wanhua Chemical and Jiujiang Shanshui
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Jiujiang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Jiujiang Shanshui Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiujiang Shanshui 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 Jiujiang Shanshui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiujiang Shanshui has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Jiujiang Shanshui go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Jiujiang Shanshui
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.71 times more return on investment than Jiujiang Shanshui. However, Wanhua Chemical Group is 1.41 times less risky than Jiujiang Shanshui. It trades about -0.01 of its potential returns per unit of risk. Jiujiang Shanshui Technology is currently generating about -0.02 per unit of risk. If you would invest 8,065 in Wanhua Chemical Group on August 26, 2024 and sell it today you would lose (676.00) from holding Wanhua Chemical Group or give up 8.38% 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. Jiujiang Shanshui Technology
Performance |
| Timeline |
| Wanhua Chemical Group |
| Jiujiang Shanshui |
Wanhua Chemical and Jiujiang Shanshui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Jiujiang Shanshui
The main advantage of trading using opposite Wanhua Chemical and Jiujiang Shanshui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Jiujiang Shanshui 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 Jiujiang Shanshui will offset losses from the drop in Jiujiang Shanshui'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 |
| Jiujiang Shanshui vs. Qilu Bank Co | Jiujiang Shanshui vs. Telling Telecommunication Holding | Jiujiang Shanshui vs. HeNan Splendor Science | Jiujiang Shanshui vs. Jilin Jlu Communication |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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