Correlation Between China Securities and Anhui Liuguo
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By analyzing existing cross correlation between China Securities 800 and Anhui Liuguo Chemical, you can compare the effects of market volatilities on China Securities and Anhui Liuguo 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 China Securities with a short position of Anhui Liuguo. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Anhui Liuguo.
Diversification Opportunities for China Securities and Anhui Liuguo
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Anhui is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Anhui Liuguo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Liuguo Chemical and China Securities 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 China Securities 800 are associated (or correlated) with Anhui Liuguo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Liuguo Chemical has no effect on the direction of China Securities i.e., China Securities and Anhui Liuguo go up and down completely randomly.
Pair Corralation between China Securities and Anhui Liuguo
Assuming the 90 days trading horizon China Securities is expected to generate 1.83 times less return on investment than Anhui Liuguo. But when comparing it to its historical volatility, China Securities 800 is 2.39 times less risky than Anhui Liuguo. It trades about 0.04 of its potential returns per unit of risk. Anhui Liuguo Chemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Anhui Liuguo Chemical on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Anhui Liuguo Chemical or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Anhui Liuguo Chemical
Performance |
| Timeline |
China Securities and Anhui Liuguo Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Anhui Liuguo Chemical
Pair trading matchups for Anhui Liuguo
Pair Trading with China Securities and Anhui Liuguo
The main advantage of trading using opposite China Securities and Anhui Liuguo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Anhui Liuguo 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 Liuguo will offset losses from the drop in Anhui Liuguo's long position.| China Securities vs. Xiwang Foodstuffs Co | China Securities vs. Beijing Sanyuan Foods | China Securities vs. Xinjiang Tianrun Dairy | China Securities vs. GRINM Semiconductor Materials |
| Anhui Liuguo vs. Zijin Mining Group | Anhui Liuguo vs. Wanhua Chemical Group | Anhui Liuguo vs. Baoshan Iron Steel | Anhui Liuguo 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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