Correlation Between Wanhua Chemical and Rising Nonferrous
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By analyzing existing cross correlation between Wanhua Chemical Group and Rising Nonferrous Metals, you can compare the effects of market volatilities on Wanhua Chemical and Rising Nonferrous 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 Rising Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Rising Nonferrous.
Diversification Opportunities for Wanhua Chemical and Rising Nonferrous
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Rising is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals 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 Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Rising Nonferrous go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Rising Nonferrous
Assuming the 90 days trading horizon Wanhua Chemical is expected to generate 4.05 times less return on investment than Rising Nonferrous. But when comparing it to its historical volatility, Wanhua Chemical Group is 1.28 times less risky than Rising Nonferrous. It trades about 0.04 of its potential returns per unit of risk. Rising Nonferrous Metals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,473 in Rising Nonferrous Metals on August 29, 2024 and sell it today you would earn a total of 527.00 from holding Rising Nonferrous Metals or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Rising Nonferrous Metals
Performance |
| Timeline |
| Wanhua Chemical Group |
| Rising Nonferrous Metals |
Wanhua Chemical and Rising Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Rising Nonferrous
The main advantage of trading using opposite Wanhua Chemical and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Rising Nonferrous 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 Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.| Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Inner Mongolia BaoTou |
| Rising Nonferrous vs. Xiwang Foodstuffs Co | Rising Nonferrous vs. HaiXin Foods Co | Rising Nonferrous vs. Goldlok Toys Holdings | Rising Nonferrous vs. Jinling Hotel Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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