Correlation Between Dongjiang Environmental and Anyang Iron
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By analyzing existing cross correlation between Dongjiang Environmental Co and Anyang Iron Steel, you can compare the effects of market volatilities on Dongjiang Environmental and Anyang Iron 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 Dongjiang Environmental with a short position of Anyang Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and Anyang Iron.
Diversification Opportunities for Dongjiang Environmental and Anyang Iron
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongjiang and Anyang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co and Anyang Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anyang Iron Steel and Dongjiang Environmental 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 Dongjiang Environmental Co are associated (or correlated) with Anyang Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anyang Iron Steel has no effect on the direction of Dongjiang Environmental i.e., Dongjiang Environmental and Anyang Iron go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and Anyang Iron
Assuming the 90 days trading horizon Dongjiang Environmental Co is expected to under-perform the Anyang Iron. But the stock apears to be less risky and, when comparing its historical volatility, Dongjiang Environmental Co is 1.14 times less risky than Anyang Iron. The stock trades about -0.1 of its potential returns per unit of risk. The Anyang Iron Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Anyang Iron Steel on November 30, 2024 and sell it today you would earn a total of 2.00 from holding Anyang Iron Steel or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjiang Environmental Co vs. Anyang Iron Steel
Performance |
| Timeline |
| Dongjiang Environmental |
| Anyang Iron Steel |
Dongjiang Environmental and Anyang Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjiang Environmental and Anyang Iron
The main advantage of trading using opposite Dongjiang Environmental and Anyang Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental position performs unexpectedly, Anyang Iron 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 Anyang Iron will offset losses from the drop in Anyang Iron's long position.| Dongjiang Environmental vs. Shandong Polymer Biochemicals | Dongjiang Environmental vs. Sunwoda Electronic | Dongjiang Environmental vs. Bengang Steel Plates | Dongjiang Environmental vs. Dymatic Chemicals |
| Anyang Iron vs. HanS Laser Tech | Anyang Iron vs. Elec Tech International Co | Anyang Iron vs. Liuzhou Iron Steel | Anyang Iron vs. Longshine Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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