Correlation Between Wanhua Chemical and Bloomage Biotechnology
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By analyzing existing cross correlation between Wanhua Chemical Group and Bloomage Biotechnology Corp, you can compare the effects of market volatilities on Wanhua Chemical and Bloomage Biotechnology 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 Bloomage Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Bloomage Biotechnology.
Diversification Opportunities for Wanhua Chemical and Bloomage Biotechnology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wanhua and Bloomage is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology 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 Bloomage Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomage Biotechnology has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Bloomage Biotechnology go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Bloomage Biotechnology
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to generate 0.75 times more return on investment than Bloomage Biotechnology. However, Wanhua Chemical Group is 1.33 times less risky than Bloomage Biotechnology. It trades about -0.28 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.24 per unit of risk. If you would invest 7,426 in Wanhua Chemical Group on October 20, 2024 and sell it today you would lose (565.00) from holding Wanhua Chemical Group or give up 7.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhua Chemical Group vs. Bloomage Biotechnology Corp
Performance |
| Timeline |
| Wanhua Chemical Group |
| Bloomage Biotechnology |
Wanhua Chemical and Bloomage Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and Bloomage Biotechnology
The main advantage of trading using opposite Wanhua Chemical and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Bloomage Biotechnology 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 Bloomage Biotechnology will offset losses from the drop in Bloomage Biotechnology's long position.| Wanhua Chemical vs. Changjiang Jinggong Steel | Wanhua Chemical vs. Shandong Iron and | Wanhua Chemical vs. Eit Environmental Development | Wanhua Chemical vs. Anyang Iron Steel |
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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