Correlation Between Anhui Fuhuang and Integrated Electronic
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By analyzing existing cross correlation between Anhui Fuhuang Steel and Integrated Electronic Systems, you can compare the effects of market volatilities on Anhui Fuhuang and Integrated Electronic 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 Integrated Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and Integrated Electronic.
Diversification Opportunities for Anhui Fuhuang and Integrated Electronic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Integrated is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel and Integrated Electronic Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Electronic 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 Integrated Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Electronic has no effect on the direction of Anhui Fuhuang i.e., Anhui Fuhuang and Integrated Electronic go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and Integrated Electronic
Assuming the 90 days trading horizon Anhui Fuhuang Steel is expected to generate 0.87 times more return on investment than Integrated Electronic. However, Anhui Fuhuang Steel is 1.15 times less risky than Integrated Electronic. It trades about 0.01 of its potential returns per unit of risk. Integrated Electronic Systems is currently generating about -0.01 per unit of risk. If you would invest 567.00 in Anhui Fuhuang Steel on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Anhui Fuhuang Steel or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. Integrated Electronic Systems
Performance |
| Timeline |
| Anhui Fuhuang Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Integrated Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anhui Fuhuang and Integrated Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and Integrated Electronic
The main advantage of trading using opposite Anhui Fuhuang and Integrated Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang position performs unexpectedly, Integrated Electronic 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 Integrated Electronic will offset losses from the drop in Integrated Electronic's long position.The idea behind Anhui Fuhuang Steel and Integrated Electronic Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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