Correlation Between Sinosteel Luonai and Wanhua Chemical
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By analyzing existing cross correlation between Sinosteel Luonai Materials and Wanhua Chemical Group, you can compare the effects of market volatilities on Sinosteel Luonai 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 Sinosteel Luonai with a short position of Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and Wanhua Chemical.
Diversification Opportunities for Sinosteel Luonai and Wanhua Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinosteel and Wanhua is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai Materials 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 Sinosteel Luonai 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 Sinosteel Luonai Materials 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 Sinosteel Luonai i.e., Sinosteel Luonai and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and Wanhua Chemical
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to generate 0.45 times more return on investment than Wanhua Chemical. However, Sinosteel Luonai Materials is 2.21 times less risky than Wanhua Chemical. It trades about 0.3 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.01 per unit of risk. If you would invest 373.00 in Sinosteel Luonai Materials on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Sinosteel Luonai Materials or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. Wanhua Chemical Group
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| Wanhua Chemical Group |
Sinosteel Luonai and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and Wanhua Chemical
The main advantage of trading using opposite Sinosteel Luonai and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai 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.| Sinosteel Luonai vs. Malion New Materials | Sinosteel Luonai vs. Sanxiang Advanced Materials | Sinosteel Luonai vs. Tonghua Grape Wine | Sinosteel Luonai vs. Anhui Gujing Distillery |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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