Correlation Between Anhui Huilong and Lier Chemical
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By analyzing existing cross correlation between Anhui Huilong Agricultural and Lier Chemical Co, you can compare the effects of market volatilities on Anhui Huilong and Lier Chemical 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 Huilong with a short position of Lier Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huilong and Lier Chemical.
Diversification Opportunities for Anhui Huilong and Lier Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Lier is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huilong Agricultural and Lier Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lier Chemical and Anhui Huilong 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 Huilong Agricultural are associated (or correlated) with Lier Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lier Chemical has no effect on the direction of Anhui Huilong i.e., Anhui Huilong and Lier Chemical go up and down completely randomly.
Pair Corralation between Anhui Huilong and Lier Chemical
Assuming the 90 days trading horizon Anhui Huilong Agricultural is expected to generate 1.55 times more return on investment than Lier Chemical. However, Anhui Huilong is 1.55 times more volatile than Lier Chemical Co. It trades about 0.08 of its potential returns per unit of risk. Lier Chemical Co is currently generating about 0.02 per unit of risk. If you would invest 483.00 in Anhui Huilong Agricultural on September 5, 2024 and sell it today you would earn a total of 149.00 from holding Anhui Huilong Agricultural or generate 30.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huilong Agricultural vs. Lier Chemical Co
Performance |
| Timeline |
| Anhui Huilong Agricu |
| Lier Chemical |
Anhui Huilong and Lier Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huilong and Lier Chemical
The main advantage of trading using opposite Anhui Huilong and Lier Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huilong position performs unexpectedly, Lier Chemical 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 Lier Chemical will offset losses from the drop in Lier Chemical's long position.| Anhui Huilong vs. Guangxi Wuzhou Communications | Anhui Huilong vs. Wintao Communications Co | Anhui Huilong vs. Innovative Medical Management | Anhui Huilong vs. Tongyu Communication |
| Lier Chemical vs. Anhui Huilong Agricultural | Lier Chemical vs. Qijing Machinery | Lier Chemical vs. Rising Nonferrous Metals | Lier Chemical vs. Huasi Agricultural Development |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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