Correlation Between Wanhua Chemical and Anhui Conch
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By analyzing existing cross correlation between Wanhua Chemical Group and Anhui Conch Cement, you can compare the effects of market volatilities on Wanhua Chemical and Anhui Conch 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 Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Anhui Conch.
Diversification Opportunities for Wanhua Chemical and Anhui Conch
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Anhui is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement 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 Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Anhui Conch go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Anhui Conch
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Anhui Conch. In addition to that, Wanhua Chemical is 1.04 times more volatile than Anhui Conch Cement. It trades about -0.02 of its total potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.0 per unit of volatility. If you would invest 2,803 in Anhui Conch Cement on September 3, 2024 and sell it today you would lose (237.00) from holding Anhui Conch Cement or give up 8.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Anhui Conch Cement
Performance |
| Timeline |
| Wanhua Chemical Group |
| Anhui Conch Cement |
Wanhua Chemical and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Anhui Conch
The main advantage of trading using opposite Wanhua Chemical and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Anhui Conch 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 Conch will offset losses from the drop in Anhui Conch's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Hoshine Silicon Ind |
| Anhui Conch vs. Zhejiang Qianjiang Motorcycle | Anhui Conch vs. Jinhui Liquor Co | Anhui Conch vs. Changchun Faway Automobile | Anhui Conch vs. Chongqing Changan Automobile |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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