Correlation Between Wanhua Chemical and Orinko Advanced
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By analyzing existing cross correlation between Wanhua Chemical Group and Orinko Advanced Plastics, you can compare the effects of market volatilities on Wanhua Chemical and Orinko Advanced 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 Orinko Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Orinko Advanced.
Diversification Opportunities for Wanhua Chemical and Orinko Advanced
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wanhua and Orinko is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Orinko Advanced Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orinko Advanced Plastics 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 Orinko Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orinko Advanced Plastics has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Orinko Advanced go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Orinko Advanced
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Orinko Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 2.22 times less risky than Orinko Advanced. The stock trades about -0.27 of its potential returns per unit of risk. The Orinko Advanced Plastics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Orinko Advanced Plastics on October 28, 2024 and sell it today you would lose (8.00) from holding Orinko Advanced Plastics or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Orinko Advanced Plastics
Performance |
| Timeline |
| Wanhua Chemical Group |
| Orinko Advanced Plastics |
Wanhua Chemical and Orinko Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Orinko Advanced
The main advantage of trading using opposite Wanhua Chemical and Orinko Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Orinko Advanced 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 Orinko Advanced will offset losses from the drop in Orinko Advanced's long position.| Wanhua Chemical vs. Anhui Fuhuang Steel | Wanhua Chemical vs. BrightGene Bio Medical | Wanhua Chemical vs. Hangzhou Guotai Environmental | Wanhua Chemical vs. Fujian Nanwang Environment |
| Orinko Advanced vs. Zhejiang Kingland Pipeline | Orinko Advanced vs. Guangxi Wuzhou Communications | Orinko Advanced vs. TianJin 712 Communication | Orinko Advanced vs. BTG Hotels Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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