Correlation Between Wanhua Chemical and Luyin Investment
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By analyzing existing cross correlation between Wanhua Chemical Group and Luyin Investment Group, you can compare the effects of market volatilities on Wanhua Chemical and Luyin Investment 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 Luyin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhua Chemical and Luyin Investment.
Diversification Opportunities for Wanhua Chemical and Luyin Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wanhua and Luyin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wanhua Chemical Group and Luyin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luyin Investment 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 Luyin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luyin Investment has no effect on the direction of Wanhua Chemical i.e., Wanhua Chemical and Luyin Investment go up and down completely randomly.
Pair Corralation between Wanhua Chemical and Luyin Investment
Assuming the 90 days trading horizon Wanhua Chemical is expected to generate 4.62 times less return on investment than Luyin Investment. In addition to that, Wanhua Chemical is 1.08 times more volatile than Luyin Investment Group. It trades about 0.05 of its total potential returns per unit of risk. Luyin Investment Group is currently generating about 0.23 per unit of volatility. If you would invest 466.00 in Luyin Investment Group on September 12, 2024 and sell it today you would earn a total of 164.00 from holding Luyin Investment Group or generate 35.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wanhua Chemical Group vs. Luyin Investment Group
Performance |
Timeline |
Wanhua Chemical Group |
Luyin Investment |
Wanhua Chemical and Luyin Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wanhua Chemical and Luyin Investment
The main advantage of trading using opposite Wanhua Chemical and Luyin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhua Chemical position performs unexpectedly, Luyin Investment 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 Luyin Investment will offset losses from the drop in Luyin Investment's long position.Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Rongsheng Petrochemical Co | Wanhua Chemical vs. Hoshine Silicon Ind |
Luyin Investment vs. Zijin Mining Group | Luyin Investment vs. Wanhua Chemical Group | Luyin Investment vs. Baoshan Iron Steel | Luyin Investment vs. Rongsheng Petrochemical Co |
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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