Correlation Between Wanhua Chemical and Anhui Huilong
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By analyzing existing cross correlation between Wanhua Chemical Group and Anhui Huilong Agricultural, you can compare the effects of market volatilities on Wanhua Chemical and Anhui Huilong 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 Anhui Huilong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Anhui Huilong.
Diversification Opportunities for Wanhua Chemical and Anhui Huilong
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wanhua and Anhui is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Anhui Huilong Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huilong Agricu 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 Anhui Huilong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huilong Agricu has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Anhui Huilong go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Anhui Huilong
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Anhui Huilong. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.56 times less risky than Anhui Huilong. The stock trades about -0.02 of its potential returns per unit of risk. The Anhui Huilong Agricultural is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 417.00 in Anhui Huilong Agricultural on September 26, 2024 and sell it today you would earn a total of 158.00 from holding Anhui Huilong Agricultural or generate 37.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wanhua Chemical Group vs. Anhui Huilong Agricultural
Performance |
Timeline |
Wanhua Chemical Group |
Anhui Huilong Agricu |
Wanhua Chemical and Anhui Huilong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wanhua Chemical and Anhui Huilong
The main advantage of trading using opposite Wanhua Chemical and Anhui Huilong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Anhui Huilong 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 Anhui Huilong will offset losses from the drop in Anhui Huilong's long position.Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
Anhui Huilong vs. Zijin Mining Group | Anhui Huilong vs. Wanhua Chemical Group | Anhui Huilong vs. Baoshan Iron Steel | Anhui Huilong vs. Shandong Gold Mining |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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