Correlation Between Wanhua Chemical and Chengtun Mining
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By analyzing existing cross correlation between Wanhua Chemical Group and Chengtun Mining Group, you can compare the effects of market volatilities on Wanhua Chemical and Chengtun Mining 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 Chengtun Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Chengtun Mining.
Diversification Opportunities for Wanhua Chemical and Chengtun Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Chengtun is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Chengtun Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengtun Mining Group 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 Chengtun Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengtun Mining Group has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Chengtun Mining go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Chengtun Mining
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Chengtun Mining. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.45 times less risky than Chengtun Mining. The stock trades about -0.37 of its potential returns per unit of risk. The Chengtun Mining Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 470.00 in Chengtun Mining Group on October 25, 2024 and sell it today you would earn a total of 60.00 from holding Chengtun Mining Group or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Chengtun Mining Group
Performance |
| Timeline |
| Wanhua Chemical Group |
| Chengtun Mining Group |
Wanhua Chemical and Chengtun Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Chengtun Mining
The main advantage of trading using opposite Wanhua Chemical and Chengtun Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Chengtun Mining 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 Chengtun Mining will offset losses from the drop in Chengtun Mining's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Inner Mongolia BaoTou |
| Chengtun Mining vs. Zijin Mining Group | Chengtun Mining vs. Wanhua Chemical Group | Chengtun Mining vs. Baoshan Iron Steel | Chengtun Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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