Correlation Between Shandong Intco and Anhui Jianghuai
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By analyzing existing cross correlation between Shandong Intco Medical and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Shandong Intco 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 Shandong Intco with a short position of Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Intco and Anhui Jianghuai.
Diversification Opportunities for Shandong Intco and Anhui Jianghuai
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Anhui is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Intco Medical 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 Shandong Intco 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 Shandong Intco Medical 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 Shandong Intco i.e., Shandong Intco and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Shandong Intco and Anhui Jianghuai
Assuming the 90 days trading horizon Shandong Intco is expected to generate 6.1 times less return on investment than Anhui Jianghuai. But when comparing it to its historical volatility, Shandong Intco Medical is 1.06 times less risky than Anhui Jianghuai. It trades about 0.03 of its potential returns per unit of risk. Anhui Jianghuai Automobile is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,623 in Anhui Jianghuai Automobile on November 1, 2024 and sell it today you would earn a total of 2,466 from holding Anhui Jianghuai Automobile or generate 151.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Intco Medical vs. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Shandong Intco Medical |
| Anhui Jianghuai Auto |
Shandong Intco and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Intco and Anhui Jianghuai
The main advantage of trading using opposite Shandong Intco and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Intco 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.| Shandong Intco vs. Agricultural Bank of | Shandong Intco vs. Industrial and Commercial | Shandong Intco vs. Bank of China | Shandong Intco vs. China Construction Bank |
| Anhui Jianghuai vs. Xiamen Goldenhome Co | Anhui Jianghuai vs. Ningbo Fujia Industrial | Anhui Jianghuai vs. UE Furniture Co | Anhui Jianghuai vs. Tibet Huayu Mining |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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