Correlation Between Wanhua Chemical and Anhui Liuguo
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By analyzing existing cross correlation between Wanhua Chemical Group and Anhui Liuguo Chemical, you can compare the effects of market volatilities on Wanhua Chemical and Anhui Liuguo 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 Anhui Liuguo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Anhui Liuguo.
Diversification Opportunities for Wanhua Chemical and Anhui Liuguo
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Anhui is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Anhui Liuguo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Liuguo Chemical 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 Anhui Liuguo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Liuguo Chemical has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Anhui Liuguo go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Anhui Liuguo
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Anhui Liuguo. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.65 times less risky than Anhui Liuguo. The stock trades about -0.01 of its potential returns per unit of risk. The Anhui Liuguo Chemical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 643.00 in Anhui Liuguo Chemical on September 4, 2024 and sell it today you would lose (12.00) from holding Anhui Liuguo Chemical or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Anhui Liuguo Chemical
Performance |
| Timeline |
| Wanhua Chemical Group |
| Anhui Liuguo Chemical |
Wanhua Chemical and Anhui Liuguo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Anhui Liuguo
The main advantage of trading using opposite Wanhua Chemical and Anhui Liuguo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Anhui Liuguo 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 Anhui Liuguo will offset losses from the drop in Anhui Liuguo's long position.| Wanhua Chemical vs. Shanghai Metersbonwe FashionAccessories | Wanhua Chemical vs. Xiamen Bank Co | Wanhua Chemical vs. Postal Savings Bank | Wanhua Chemical vs. Chahua Modern Housewares |
| Anhui Liuguo vs. Zijin Mining Group | Anhui Liuguo vs. Wanhua Chemical Group | Anhui Liuguo vs. Baoshan Iron Steel | Anhui Liuguo 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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