Correlation Between Wanhua Chemical and Zijin Mining
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By analyzing existing cross correlation between Wanhua Chemical Group and Zijin Mining Group, you can compare the effects of market volatilities on Wanhua Chemical and Zijin 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Zijin Mining.
Diversification Opportunities for Wanhua Chemical and Zijin Mining
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and Zijin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Zijin Mining go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Zijin Mining
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.95 times more return on investment than Zijin Mining. However, Wanhua Chemical Group is 1.06 times less risky than Zijin Mining. It trades about -0.08 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.25 per unit of risk. If you would invest 7,932 in Wanhua Chemical Group on August 24, 2024 and sell it today you would lose (264.00) from holding Wanhua Chemical Group or give up 3.33% 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. Zijin Mining Group
Performance |
| Timeline |
| Wanhua Chemical Group |
| Zijin Mining Group |
Wanhua Chemical and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Zijin Mining
The main advantage of trading using opposite Wanhua Chemical and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Zijin 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| Wanhua Chemical vs. VeriSilicon Microelectronics Shanghai | Wanhua Chemical vs. Hoshine Silicon Ind | Wanhua Chemical vs. Shandong Ruifeng Chemical | Wanhua Chemical vs. Lianhe Chemical Technology |
| Zijin Mining vs. Zhengzhou Coal Mining | Zijin Mining vs. Universal Scientific Industrial | Zijin Mining vs. Qingdao Choho Industrial | Zijin Mining vs. Rongcheer Industrial Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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