Correlation Between Wanhua Chemical and Jiangxi Copper
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By analyzing existing cross correlation between Wanhua Chemical Group and Jiangxi Copper Co, you can compare the effects of market volatilities on Wanhua Chemical and Jiangxi Copper 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 Jiangxi Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Jiangxi Copper.
Diversification Opportunities for Wanhua Chemical and Jiangxi Copper
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wanhua and Jiangxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Jiangxi Copper Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Copper 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 Jiangxi Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Copper has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Jiangxi Copper go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Jiangxi Copper
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.9 times more return on investment than Jiangxi Copper. However, Wanhua Chemical Group is 1.11 times less risky than Jiangxi Copper. It trades about -0.24 of its potential returns per unit of risk. Jiangxi Copper Co is currently generating about -0.23 per unit of risk. If you would invest 7,960 in Wanhua Chemical Group on August 28, 2024 and sell it today you would lose (660.00) from holding Wanhua Chemical Group or give up 8.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Jiangxi Copper Co
Performance |
| Timeline |
| Wanhua Chemical Group |
| Jiangxi Copper |
Wanhua Chemical and Jiangxi Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Jiangxi Copper
The main advantage of trading using opposite Wanhua Chemical and Jiangxi Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Jiangxi Copper 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 Jiangxi Copper will offset losses from the drop in Jiangxi Copper's long position.| Wanhua Chemical vs. Der International Home | Wanhua Chemical vs. Harbin Air Conditioning | Wanhua Chemical vs. Changchun BCHT Biotechnology | Wanhua Chemical vs. UE Furniture Co |
| Jiangxi Copper vs. Wanhua Chemical Group | Jiangxi Copper vs. Shandong Gold Mining | Jiangxi Copper vs. Rongsheng Petrochemical Co | Jiangxi Copper vs. Inner Mongolia BaoTou |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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