Correlation Between Liaoning Dingjide and Wanhua Chemical
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Wanhua Chemical Group, you can compare the effects of market volatilities on Liaoning Dingjide 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 Liaoning Dingjide with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Wanhua Chemical.
Diversification Opportunities for Liaoning Dingjide and Wanhua Chemical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Wanhua is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica 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 Liaoning Dingjide 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 Liaoning Dingjide Petrochemical 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 Liaoning Dingjide i.e., Liaoning Dingjide and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Wanhua Chemical
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to under-perform the Wanhua Chemical. In addition to that, Liaoning Dingjide is 1.28 times more volatile than Wanhua Chemical Group. It trades about -0.02 of its total potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.03 per unit of volatility. If you would invest 8,816 in Wanhua Chemical Group on September 1, 2024 and sell it today you would lose (1,387) from holding Wanhua Chemical Group or give up 15.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Wanhua Chemical Group
Performance |
| Timeline |
| Liaoning Dingjide |
| Wanhua Chemical Group |
Liaoning Dingjide and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Wanhua Chemical
The main advantage of trading using opposite Liaoning Dingjide and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide 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.| Liaoning Dingjide vs. Western Metal Materials | Liaoning Dingjide vs. Gem Year Industrial Co | Liaoning Dingjide vs. Peoples Insurance of | Liaoning Dingjide vs. China Everbright Bank |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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