Correlation Between Wanhua Chemical and Sinomine Resource
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By analyzing existing cross correlation between Wanhua Chemical Group and Sinomine Resource Exploration, you can compare the effects of market volatilities on Wanhua Chemical and Sinomine Resource 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 Sinomine Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Sinomine Resource.
Diversification Opportunities for Wanhua Chemical and Sinomine Resource
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wanhua and Sinomine is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Sinomine Resource Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomine Resource 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 Sinomine Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomine Resource has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Sinomine Resource go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Sinomine Resource
Assuming the 90 days trading horizon Wanhua Chemical Group is expected to under-perform the Sinomine Resource. But the stock apears to be less risky and, when comparing its historical volatility, Wanhua Chemical Group is 1.78 times less risky than Sinomine Resource. The stock trades about -0.02 of its potential returns per unit of risk. The Sinomine Resource Exploration is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,863 in Sinomine Resource Exploration on September 24, 2024 and sell it today you would lose (1,207) from holding Sinomine Resource Exploration or give up 24.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wanhua Chemical Group vs. Sinomine Resource Exploration
Performance |
Timeline |
Wanhua Chemical Group |
Sinomine Resource |
Wanhua Chemical and Sinomine Resource Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wanhua Chemical and Sinomine Resource
The main advantage of trading using opposite Wanhua Chemical and Sinomine Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Sinomine Resource 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 Sinomine Resource will offset losses from the drop in Sinomine Resource'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 |
Sinomine Resource vs. Zijin Mining Group | Sinomine Resource vs. Wanhua Chemical Group | Sinomine Resource vs. Baoshan Iron Steel | Sinomine Resource 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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