Correlation Between Orinko Advanced and Weihai Guangwei
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By analyzing existing cross correlation between Orinko Advanced Plastics and Weihai Guangwei Composites, you can compare the effects of market volatilities on Orinko Advanced and Weihai Guangwei 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 Orinko Advanced with a short position of Weihai Guangwei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orinko Advanced and Weihai Guangwei.
Diversification Opportunities for Orinko Advanced and Weihai Guangwei
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orinko and Weihai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Orinko Advanced Plastics and Weihai Guangwei Composites in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Guangwei Comp and Orinko Advanced 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 Orinko Advanced Plastics are associated (or correlated) with Weihai Guangwei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Guangwei Comp has no effect on the direction of Orinko Advanced i.e., Orinko Advanced and Weihai Guangwei go up and down completely randomly.
Pair Corralation between Orinko Advanced and Weihai Guangwei
Assuming the 90 days trading horizon Orinko Advanced is expected to generate 1.08 times less return on investment than Weihai Guangwei. In addition to that, Orinko Advanced is 1.18 times more volatile than Weihai Guangwei Composites. It trades about 0.03 of its total potential returns per unit of risk. Weihai Guangwei Composites is currently generating about 0.04 per unit of volatility. If you would invest 2,743 in Weihai Guangwei Composites on September 12, 2024 and sell it today you would earn a total of 800.00 from holding Weihai Guangwei Composites or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orinko Advanced Plastics vs. Weihai Guangwei Composites
Performance |
| Timeline |
| Orinko Advanced Plastics |
| Weihai Guangwei Comp |
Orinko Advanced and Weihai Guangwei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orinko Advanced and Weihai Guangwei
The main advantage of trading using opposite Orinko Advanced and Weihai Guangwei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orinko Advanced position performs unexpectedly, Weihai Guangwei 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 Weihai Guangwei will offset losses from the drop in Weihai Guangwei's long position.| Orinko Advanced vs. Zijin Mining Group | Orinko Advanced vs. Wanhua Chemical Group | Orinko Advanced vs. Baoshan Iron Steel | Orinko Advanced vs. Rongsheng Petrochemical Co |
| Weihai Guangwei vs. Dazhong Transportation Group | Weihai Guangwei vs. Kangxin New Materials | Weihai Guangwei vs. Orinko Advanced Plastics | Weihai Guangwei vs. Advanced Technology Materials |
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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