Correlation Between North Huajin and Anhui Huilong
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By analyzing existing cross correlation between North Huajin Chemical and Anhui Huilong Agricultural, you can compare the effects of market volatilities on North Huajin 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 North Huajin with a short position of Anhui Huilong. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Anhui Huilong.
Diversification Opportunities for North Huajin and Anhui Huilong
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Anhui is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical 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 North Huajin 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 North Huajin Chemical 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 North Huajin i.e., North Huajin and Anhui Huilong go up and down completely randomly.
Pair Corralation between North Huajin and Anhui Huilong
Assuming the 90 days trading horizon North Huajin Chemical is expected to generate 0.97 times more return on investment than Anhui Huilong. However, North Huajin Chemical is 1.03 times less risky than Anhui Huilong. It trades about -0.29 of its potential returns per unit of risk. Anhui Huilong Agricultural is currently generating about -0.42 per unit of risk. If you would invest 508.00 in North Huajin Chemical on October 17, 2024 and sell it today you would lose (54.00) from holding North Huajin Chemical or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
North Huajin Chemical vs. Anhui Huilong Agricultural
Performance |
| Timeline |
| North Huajin Chemical |
| Anhui Huilong Agricu |
North Huajin and Anhui Huilong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Anhui Huilong
The main advantage of trading using opposite North Huajin and Anhui Huilong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin 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.| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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