Correlation Between Wanhua Chemical and Fujian Nanwang
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By analyzing existing cross correlation between Wanhua Chemical Group and Fujian Nanwang Environment, you can compare the effects of market volatilities on Wanhua Chemical and Fujian Nanwang 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 Fujian Nanwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Fujian Nanwang.
Diversification Opportunities for Wanhua Chemical and Fujian Nanwang
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wanhua and Fujian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Fujian Nanwang Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Nanwang Envir 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 Fujian Nanwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Nanwang Envir has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Fujian Nanwang go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Fujian Nanwang
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Fujian Nanwang. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.82 times less risky than Fujian Nanwang. The stock trades about -0.16 of its potential returns per unit of risk. The Fujian Nanwang Environment is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,238 in Fujian Nanwang Environment on October 28, 2024 and sell it today you would lose (85.00) from holding Fujian Nanwang Environment or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Fujian Nanwang Environment
Performance |
| Timeline |
| Wanhua Chemical Group |
| Fujian Nanwang Envir |
Wanhua Chemical and Fujian Nanwang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Fujian Nanwang
The main advantage of trading using opposite Wanhua Chemical and Fujian Nanwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Fujian Nanwang 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 Fujian Nanwang will offset losses from the drop in Fujian Nanwang's long position.| Wanhua Chemical vs. Healthcare Co | Wanhua Chemical vs. Dezhan HealthCare Co | Wanhua Chemical vs. XinJiang GuoTong Pipeline | Wanhua Chemical vs. Anhui Huaren Health |
| Fujian Nanwang vs. Zijin Mining Group | Fujian Nanwang vs. Wanhua Chemical Group | Fujian Nanwang vs. Baoshan Iron Steel | Fujian Nanwang 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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