Correlation Between Wanhua Chemical and Sichuan Tianqi
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By analyzing existing cross correlation between Wanhua Chemical Group and Sichuan Tianqi Lithium, you can compare the effects of market volatilities on Wanhua Chemical and Sichuan Tianqi 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 Sichuan Tianqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Sichuan Tianqi.
Diversification Opportunities for Wanhua Chemical and Sichuan Tianqi
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wanhua and Sichuan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Sichuan Tianqi Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Tianqi Lithium 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 Sichuan Tianqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Tianqi Lithium has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Sichuan Tianqi go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Sichuan Tianqi
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Sichuan Tianqi. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.67 times less risky than Sichuan Tianqi. The stock trades about -0.01 of its potential returns per unit of risk. The Sichuan Tianqi Lithium is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,493 in Sichuan Tianqi Lithium on September 23, 2024 and sell it today you would earn a total of 991.00 from holding Sichuan Tianqi Lithium or generate 39.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wanhua Chemical Group vs. Sichuan Tianqi Lithium
Performance |
Timeline |
Wanhua Chemical Group |
Sichuan Tianqi Lithium |
Wanhua Chemical and Sichuan Tianqi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wanhua Chemical and Sichuan Tianqi
The main advantage of trading using opposite Wanhua Chemical and Sichuan Tianqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Sichuan Tianqi 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 Sichuan Tianqi will offset losses from the drop in Sichuan Tianqi's long position.Wanhua Chemical vs. Shenzhen MYS Environmental | Wanhua Chemical vs. Grandblue Environment Co | Wanhua Chemical vs. Shenzhen Glory Medical | Wanhua Chemical vs. Zhongzhu Medical Holdings |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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