Correlation Between Anhui Fuhuang and Gansu Huangtai
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By analyzing existing cross correlation between Anhui Fuhuang Steel and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Anhui Fuhuang and Gansu Huangtai 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 Fuhuang with a short position of Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and Gansu Huangtai.
Diversification Opportunities for Anhui Fuhuang and Gansu Huangtai
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Gansu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine and Anhui Fuhuang 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 Fuhuang Steel are associated (or correlated) with Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Anhui Fuhuang i.e., Anhui Fuhuang and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and Gansu Huangtai
Assuming the 90 days trading horizon Anhui Fuhuang Steel is expected to generate 0.87 times more return on investment than Gansu Huangtai. However, Anhui Fuhuang Steel is 1.15 times less risky than Gansu Huangtai. It trades about 0.36 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.07 per unit of risk. If you would invest 601.00 in Anhui Fuhuang Steel on September 12, 2024 and sell it today you would earn a total of 166.00 from holding Anhui Fuhuang Steel or generate 27.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Anhui Fuhuang Steel |
| Gansu Huangtai Wine |
Anhui Fuhuang and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and Gansu Huangtai
The main advantage of trading using opposite Anhui Fuhuang and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| Anhui Fuhuang vs. Healthcare Co | Anhui Fuhuang vs. Shanghai Rongtai Health | Anhui Fuhuang vs. Impulse Qingdao Health | Anhui Fuhuang vs. Yuan Longping High tech |
| Gansu Huangtai vs. China Petroleum Chemical | Gansu Huangtai vs. PetroChina Co Ltd | Gansu Huangtai vs. China State Construction | Gansu Huangtai vs. China Railway Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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