Correlation Between Anhui Gujing and Wenzhou Hongfeng
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By analyzing existing cross correlation between Anhui Gujing Distillery and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Anhui Gujing and Wenzhou Hongfeng 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 Anhui Gujing with a short position of Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Gujing and Wenzhou Hongfeng.
Diversification Opportunities for Anhui Gujing and Wenzhou Hongfeng
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Wenzhou is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Gujing Distillery and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele and Anhui Gujing 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 Anhui Gujing Distillery are associated (or correlated) with Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Anhui Gujing i.e., Anhui Gujing and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Anhui Gujing and Wenzhou Hongfeng
Assuming the 90 days trading horizon Anhui Gujing Distillery is expected to under-perform the Wenzhou Hongfeng. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Gujing Distillery is 1.96 times less risky than Wenzhou Hongfeng. The stock trades about -0.19 of its potential returns per unit of risk. The Wenzhou Hongfeng Electrical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 683.00 in Wenzhou Hongfeng Electrical on September 12, 2024 and sell it today you would lose (9.00) from holding Wenzhou Hongfeng Electrical or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Gujing Distillery vs. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Anhui Gujing Distillery |
| Wenzhou Hongfeng Ele |
Anhui Gujing and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Gujing and Wenzhou Hongfeng
The main advantage of trading using opposite Anhui Gujing and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Gujing position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| Anhui Gujing vs. China Petroleum Chemical | Anhui Gujing vs. PetroChina Co Ltd | Anhui Gujing vs. China State Construction | Anhui Gujing vs. China Railway Group |
| Wenzhou Hongfeng vs. YLZ Information Tech | Wenzhou Hongfeng vs. Xiamen Goldenhome Co | Wenzhou Hongfeng vs. ButOne Information Corp | Wenzhou Hongfeng vs. Nanxing Furniture Machinery |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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