Correlation Between Nantong Jiangshan and Wanhua Chemical
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By analyzing existing cross correlation between Nantong Jiangshan Agrochemical and Wanhua Chemical Group, you can compare the effects of market volatilities on Nantong Jiangshan and Wanhua Chemical 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 Nantong Jiangshan with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Jiangshan and Wanhua Chemical.
Diversification Opportunities for Nantong Jiangshan and Wanhua Chemical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nantong and Wanhua is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Jiangshan Agrochemical and Wanhua Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanhua Chemical Group and Nantong Jiangshan 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 Nantong Jiangshan Agrochemical are associated (or correlated) with Wanhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanhua Chemical Group has no effect on the direction of Nantong Jiangshan i.e., Nantong Jiangshan and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Nantong Jiangshan and Wanhua Chemical
Assuming the 90 days trading horizon Nantong Jiangshan Agrochemical is expected to under-perform the Wanhua Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Nantong Jiangshan Agrochemical is 1.93 times less risky than Wanhua Chemical. The stock trades about -0.37 of its potential returns per unit of risk. The Wanhua Chemical Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,853 in Wanhua Chemical Group on November 27, 2024 and sell it today you would lose (43.00) from holding Wanhua Chemical Group or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantong Jiangshan Agrochemical vs. Wanhua Chemical Group
Performance |
| Timeline |
| Nantong Jiangshan |
| Wanhua Chemical Group |
Nantong Jiangshan and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantong Jiangshan and Wanhua Chemical
The main advantage of trading using opposite Nantong Jiangshan and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Jiangshan position performs unexpectedly, Wanhua Chemical 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 Wanhua Chemical will offset losses from the drop in Wanhua Chemical's long position.| Nantong Jiangshan vs. Andon Health Co | Nantong Jiangshan vs. By health | Nantong Jiangshan vs. Guangzhou Zhujiang Brewery | Nantong Jiangshan vs. Jinxiandai Information Industry |
| Wanhua Chemical vs. Anhui Huaheng Biotechnology | Wanhua Chemical vs. Zhangjiagang Freetrade Science | Wanhua Chemical vs. Fujian Wanchen Biotechnology | Wanhua Chemical vs. JCHX Mining Management |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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