Correlation Between Anhui Gujing and Changchun Faway
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By analyzing existing cross correlation between Anhui Gujing Distillery and Changchun Faway Automobile, you can compare the effects of market volatilities on Anhui Gujing and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Gujing and Changchun Faway.
Diversification Opportunities for Anhui Gujing and Changchun Faway
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Changchun is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Gujing Distillery and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Anhui Gujing i.e., Anhui Gujing and Changchun Faway go up and down completely randomly.
Pair Corralation between Anhui Gujing and Changchun Faway
Assuming the 90 days trading horizon Anhui Gujing is expected to generate 3.4 times less return on investment than Changchun Faway. In addition to that, Anhui Gujing is 1.17 times more volatile than Changchun Faway Automobile. It trades about 0.02 of its total potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.09 per unit of volatility. If you would invest 904.00 in Changchun Faway Automobile on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Changchun Faway Automobile or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Gujing Distillery vs. Changchun Faway Automobile
Performance |
| Timeline |
| Anhui Gujing Distillery |
| Changchun Faway Auto |
Anhui Gujing and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Gujing and Changchun Faway
The main advantage of trading using opposite Anhui Gujing and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Gujing position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Anhui Gujing vs. Will Semiconductor Co | Anhui Gujing vs. Zhongtong Guomai Communication | Anhui Gujing vs. Wuhan Yangtze Communication | Anhui Gujing vs. GRINM Semiconductor Materials |
| Changchun Faway vs. Hefei Metalforming Mach | Changchun Faway vs. Shanghai Jinfeng Wine | Changchun Faway vs. Anhui Gujing Distillery | Changchun Faway vs. Duzhe Publishing Media |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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