Correlation Between Anhui Fuhuang and Shenzhen
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By analyzing existing cross correlation between Anhui Fuhuang Steel and Shenzhen AV Display Co, you can compare the effects of market volatilities on Anhui Fuhuang and Shenzhen 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 Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and Shenzhen.
Diversification Opportunities for Anhui Fuhuang and Shenzhen
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Shenzhen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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 Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Anhui Fuhuang i.e., Anhui Fuhuang and Shenzhen go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and Shenzhen
Assuming the 90 days trading horizon Anhui Fuhuang is expected to generate 1.2 times less return on investment than Shenzhen. But when comparing it to its historical volatility, Anhui Fuhuang Steel is 1.47 times less risky than Shenzhen. It trades about 0.03 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,980 in Shenzhen AV Display Co on September 5, 2024 and sell it today you would earn a total of 439.00 from holding Shenzhen AV Display Co or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Anhui Fuhuang Steel |
| Shenzhen AV Display |
Anhui Fuhuang and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and Shenzhen
The main advantage of trading using opposite Anhui Fuhuang and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang position performs unexpectedly, Shenzhen 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 Shenzhen will offset losses from the drop in Shenzhen's long position.| Anhui Fuhuang vs. Wanhua Chemical Group | Anhui Fuhuang vs. Baoshan Iron Steel | Anhui Fuhuang vs. Rongsheng Petrochemical Co | Anhui Fuhuang vs. Shandong Gold Mining |
| Shenzhen vs. Elite Color Environmental | Shenzhen vs. Tianjin Capital Environmental | Shenzhen vs. Wuhan Yangtze Communication | Shenzhen vs. Anhui Fuhuang Steel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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