Correlation Between Anhui Huaertai and Changshu Tongrun
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By analyzing existing cross correlation between Anhui Huaertai Chemical and Changshu Tongrun Auto, you can compare the effects of market volatilities on Anhui Huaertai and Changshu Tongrun 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 Huaertai with a short position of Changshu Tongrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaertai and Changshu Tongrun.
Diversification Opportunities for Anhui Huaertai and Changshu Tongrun
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Changshu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaertai Chemical and Changshu Tongrun Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tongrun Auto and Anhui Huaertai 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 Huaertai Chemical are associated (or correlated) with Changshu Tongrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tongrun Auto has no effect on the direction of Anhui Huaertai i.e., Anhui Huaertai and Changshu Tongrun go up and down completely randomly.
Pair Corralation between Anhui Huaertai and Changshu Tongrun
Assuming the 90 days trading horizon Anhui Huaertai Chemical is expected to generate 0.64 times more return on investment than Changshu Tongrun. However, Anhui Huaertai Chemical is 1.56 times less risky than Changshu Tongrun. It trades about 0.21 of its potential returns per unit of risk. Changshu Tongrun Auto is currently generating about 0.13 per unit of risk. If you would invest 968.00 in Anhui Huaertai Chemical on August 31, 2024 and sell it today you would earn a total of 119.00 from holding Anhui Huaertai Chemical or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Anhui Huaertai Chemical vs. Changshu Tongrun Auto
Performance |
| Timeline |
| Anhui Huaertai Chemical |
| Changshu Tongrun Auto |
Anhui Huaertai and Changshu Tongrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaertai and Changshu Tongrun
The main advantage of trading using opposite Anhui Huaertai and Changshu Tongrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaertai position performs unexpectedly, Changshu Tongrun 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 Changshu Tongrun will offset losses from the drop in Changshu Tongrun's long position.| Anhui Huaertai vs. Zijin Mining Group | Anhui Huaertai vs. Baoshan Iron Steel | Anhui Huaertai vs. Rongsheng Petrochemical Co | Anhui Huaertai vs. Hoshine Silicon Ind |
| Changshu Tongrun vs. Anhui Huaertai Chemical | Changshu Tongrun vs. Invengo Information Technology | Changshu Tongrun vs. Shenzhen Noposion Agrochemicals | Changshu Tongrun vs. Guangzhou Ruoyuchen Information |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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