Correlation Between New Hope and Anhui Tongguan
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By analyzing existing cross correlation between New Hope Dairy and Anhui Tongguan Copper, you can compare the effects of market volatilities on New Hope and Anhui Tongguan 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 New Hope with a short position of Anhui Tongguan. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Anhui Tongguan.
Diversification Opportunities for New Hope and Anhui Tongguan
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Anhui is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Anhui Tongguan Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Tongguan Copper and New Hope 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 New Hope Dairy are associated (or correlated) with Anhui Tongguan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Tongguan Copper has no effect on the direction of New Hope i.e., New Hope and Anhui Tongguan go up and down completely randomly.
Pair Corralation between New Hope and Anhui Tongguan
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.73 times more return on investment than Anhui Tongguan. However, New Hope Dairy is 1.36 times less risky than Anhui Tongguan. It trades about 0.14 of its potential returns per unit of risk. Anhui Tongguan Copper is currently generating about 0.03 per unit of risk. If you would invest 1,419 in New Hope Dairy on October 20, 2024 and sell it today you would earn a total of 111.00 from holding New Hope Dairy or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Anhui Tongguan Copper
Performance |
| Timeline |
| New Hope Dairy |
| Anhui Tongguan Copper |
New Hope and Anhui Tongguan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Anhui Tongguan
The main advantage of trading using opposite New Hope and Anhui Tongguan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Anhui Tongguan 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 Anhui Tongguan will offset losses from the drop in Anhui Tongguan's long position.| New Hope vs. Anhui Tongguan Copper | New Hope vs. Ningxia Younglight Chemicals | New Hope vs. Ye Chiu Metal | New Hope vs. Guangdong Jingyi Metal |
| Anhui Tongguan vs. Bank of Communications | Anhui Tongguan vs. Wuhan Yangtze Communication | Anhui Tongguan vs. Hubei Forbon Technology | Anhui Tongguan vs. Jiangxi Hengda Hi Tech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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