Correlation Between Anhui Fuhuang and Hainan HNA
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By analyzing existing cross correlation between Anhui Fuhuang Steel and Hainan HNA Infrastructure, you can compare the effects of market volatilities on Anhui Fuhuang and Hainan HNA 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 Hainan HNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and Hainan HNA.
Diversification Opportunities for Anhui Fuhuang and Hainan HNA
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and Hainan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel and Hainan HNA Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan HNA Infrastructure 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 Hainan HNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan HNA Infrastructure has no effect on the direction of Anhui Fuhuang i.e., Anhui Fuhuang and Hainan HNA go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and Hainan HNA
Assuming the 90 days trading horizon Anhui Fuhuang Steel is expected to generate 2.07 times more return on investment than Hainan HNA. However, Anhui Fuhuang is 2.07 times more volatile than Hainan HNA Infrastructure. It trades about 0.01 of its potential returns per unit of risk. Hainan HNA Infrastructure is currently generating about -0.08 per unit of risk. If you would invest 593.00 in Anhui Fuhuang Steel on November 7, 2024 and sell it today you would lose (25.00) from holding Anhui Fuhuang Steel or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. Hainan HNA Infrastructure
Performance |
| Timeline |
| Anhui Fuhuang Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hainan HNA Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anhui Fuhuang and Hainan HNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and Hainan HNA
The main advantage of trading using opposite Anhui Fuhuang and Hainan HNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang position performs unexpectedly, Hainan HNA 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 Hainan HNA will offset losses from the drop in Hainan HNA's long position.The idea behind Anhui Fuhuang Steel and Hainan HNA Infrastructure 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 Stocks Directory module to find actively traded stocks across global markets.
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