Correlation Between Aba Chemicals and Anhui Jianghuai
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By analyzing existing cross correlation between Aba Chemicals Corp and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Aba Chemicals and Anhui Jianghuai 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 Aba Chemicals with a short position of Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Anhui Jianghuai.
Diversification Opportunities for Aba Chemicals and Anhui Jianghuai
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aba and Anhui is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Anhui Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Aba Chemicals and Anhui Jianghuai
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Anhui Jianghuai. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.27 times less risky than Anhui Jianghuai. The stock trades about -0.1 of its potential returns per unit of risk. The Anhui Jianghuai Automobile is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,565 in Anhui Jianghuai Automobile on November 4, 2024 and sell it today you would earn a total of 524.00 from holding Anhui Jianghuai Automobile or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Aba Chemicals Corp |
| Anhui Jianghuai Auto |
Aba Chemicals and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Anhui Jianghuai
The main advantage of trading using opposite Aba Chemicals and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Anhui Jianghuai 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 Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| Aba Chemicals vs. Tongyu Communication | Aba Chemicals vs. Eyebright Medical Technology | Aba Chemicals vs. China Sports Industry | Aba Chemicals vs. Fujian Newland Computer |
| Anhui Jianghuai vs. Offshore Oil Engineering | Anhui Jianghuai vs. Ping An Insurance | Anhui Jianghuai vs. CSSC Offshore Marine | Anhui Jianghuai vs. Shenzhen AV Display Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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