Correlation Between Wanhua Chemical and Anyang Iron
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By analyzing existing cross correlation between Wanhua Chemical Group and Anyang Iron Steel, you can compare the effects of market volatilities on Wanhua Chemical and Anyang Iron 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 Anyang Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Anyang Iron.
Diversification Opportunities for Wanhua Chemical and Anyang Iron
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wanhua and Anyang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Anyang Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anyang Iron Steel 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 Anyang Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anyang Iron Steel has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Anyang Iron go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Anyang Iron
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.81 times more return on investment than Anyang Iron. However, Wanhua Chemical Group is 1.23 times less risky than Anyang Iron. It trades about -0.12 of its potential returns per unit of risk. Anyang Iron Steel is currently generating about -0.24 per unit of risk. If you would invest 7,733 in Wanhua Chemical Group on September 3, 2024 and sell it today you would lose (304.00) from holding Wanhua Chemical Group or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Anyang Iron Steel
Performance |
| Timeline |
| Wanhua Chemical Group |
| Anyang Iron Steel |
Wanhua Chemical and Anyang Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Anyang Iron
The main advantage of trading using opposite Wanhua Chemical and Anyang Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Anyang Iron 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 Anyang Iron will offset losses from the drop in Anyang Iron's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Hoshine Silicon Ind |
| Anyang Iron vs. ChengDu Hi Tech Development | Anyang Iron vs. Chahua Modern Housewares | Anyang Iron vs. Jiangxi Hengda Hi Tech | Anyang Iron vs. Jonjee Hi tech Industrial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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