Correlation Between Anhui Fuhuang and China International
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By analyzing existing cross correlation between Anhui Fuhuang Steel and China International Capital, you can compare the effects of market volatilities on Anhui Fuhuang and China International 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 China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Fuhuang and China International.
Diversification Opportunities for Anhui Fuhuang and China International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Fuhuang Steel and China International Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of Anhui Fuhuang i.e., Anhui Fuhuang and China International go up and down completely randomly.
Pair Corralation between Anhui Fuhuang and China International
Assuming the 90 days trading horizon Anhui Fuhuang Steel is expected to generate 1.03 times more return on investment than China International. However, Anhui Fuhuang is 1.03 times more volatile than China International Capital. It trades about 0.26 of its potential returns per unit of risk. China International Capital is currently generating about 0.13 per unit of risk. If you would invest 366.00 in Anhui Fuhuang Steel on September 3, 2024 and sell it today you would earn a total of 273.00 from holding Anhui Fuhuang Steel or generate 74.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Fuhuang Steel vs. China International Capital
Performance |
| Timeline |
| Anhui Fuhuang Steel |
| China International |
Anhui Fuhuang and China International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Fuhuang and China International
The main advantage of trading using opposite Anhui Fuhuang and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Fuhuang position performs unexpectedly, China International 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 China International will offset losses from the drop in China International's long position.| Anhui Fuhuang vs. Zijin Mining Group | Anhui Fuhuang vs. Baoshan Iron Steel | Anhui Fuhuang vs. Rongsheng Petrochemical Co | Anhui Fuhuang vs. Hoshine Silicon Ind |
| China International vs. Ye Chiu Metal | China International vs. Guangdong Liantai Environmental | China International vs. Anhui Fuhuang Steel | China International vs. Tongxing Environmental Protection |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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