Correlation Between Wanhua Chemical and GRIPM Advanced
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By analyzing existing cross correlation between Wanhua Chemical Group and GRIPM Advanced Materials, you can compare the effects of market volatilities on Wanhua Chemical and GRIPM 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 GRIPM Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and GRIPM Advanced.
Diversification Opportunities for Wanhua Chemical and GRIPM Advanced
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wanhua and GRIPM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and GRIPM Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIPM Advanced Materials 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 GRIPM Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIPM Advanced Materials has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and GRIPM Advanced go up and down completely randomly.
Pair Corralation between Wanhua Chemical and GRIPM Advanced
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the GRIPM Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.89 times less risky than GRIPM Advanced. The stock trades about -0.02 of its potential returns per unit of risk. The GRIPM Advanced Materials is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,404 in GRIPM Advanced Materials on August 25, 2024 and sell it today you would lose (174.00) from holding GRIPM Advanced Materials or give up 5.11% 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. GRIPM Advanced Materials
Performance |
| Timeline |
| Wanhua Chemical Group |
| GRIPM Advanced Materials |
Wanhua Chemical and GRIPM Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhua Chemical and GRIPM Advanced
The main advantage of trading using opposite Wanhua Chemical and GRIPM Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, GRIPM 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 GRIPM Advanced will offset losses from the drop in GRIPM Advanced's long position.| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
| GRIPM Advanced vs. Zijin Mining Group | GRIPM Advanced vs. Wanhua Chemical Group | GRIPM Advanced vs. Baoshan Iron Steel | GRIPM Advanced vs. Shandong Gold Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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