Correlation Between Anhui Huilong and Danhua Chemical
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By analyzing existing cross correlation between Anhui Huilong Agricultural and Danhua Chemical Technology, you can compare the effects of market volatilities on Anhui Huilong and Danhua 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 Danhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huilong and Danhua Chemical.
Diversification Opportunities for Anhui Huilong and Danhua Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Anhui and Danhua is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huilong Agricultural and Danhua Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danhua Chemical Tech 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 Danhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danhua Chemical Tech has no effect on the direction of Anhui Huilong i.e., Anhui Huilong and Danhua Chemical go up and down completely randomly.
Pair Corralation between Anhui Huilong and Danhua Chemical
Assuming the 90 days trading horizon Anhui Huilong is expected to generate 2.12 times less return on investment than Danhua Chemical. But when comparing it to its historical volatility, Anhui Huilong Agricultural is 1.08 times less risky than Danhua Chemical. It trades about 0.07 of its potential returns per unit of risk. Danhua Chemical Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 291.00 in Danhua Chemical Technology on September 12, 2024 and sell it today you would earn a total of 42.00 from holding Danhua Chemical Technology or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Anhui Huilong Agricultural vs. Danhua Chemical Technology
Performance |
| Timeline |
| Anhui Huilong Agricu |
| Danhua Chemical Tech |
Anhui Huilong and Danhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huilong and Danhua Chemical
The main advantage of trading using opposite Anhui Huilong and Danhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huilong position performs unexpectedly, Danhua 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 Danhua Chemical will offset losses from the drop in Danhua Chemical's long position.| Anhui Huilong vs. Sinomach Automobile Co | Anhui Huilong vs. Guangzhou Ruoyuchen Information | Anhui Huilong vs. Ningbo Ligong Online | Anhui Huilong vs. ButOne Information Corp |
| Danhua Chemical vs. Super Dragon Engineering Plastics | Danhua Chemical vs. Fuda Alloy Materials | Danhua Chemical vs. Harvest Fund Management | Danhua Chemical vs. Xinke Material |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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