Correlation Between Chengdu Kanghua and Anhui Gujing
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Anhui Gujing Distillery, you can compare the effects of market volatilities on Chengdu Kanghua and Anhui Gujing 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 Chengdu Kanghua with a short position of Anhui Gujing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Anhui Gujing.
Diversification Opportunities for Chengdu Kanghua and Anhui Gujing
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Anhui is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Anhui Gujing Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Gujing Distillery and Chengdu Kanghua 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 Chengdu Kanghua Biological are associated (or correlated) with Anhui Gujing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Gujing Distillery has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Anhui Gujing go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Anhui Gujing
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to under-perform the Anhui Gujing. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Kanghua Biological is 1.23 times less risky than Anhui Gujing. The stock trades about -0.12 of its potential returns per unit of risk. The Anhui Gujing Distillery is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 16,687 in Anhui Gujing Distillery on November 6, 2024 and sell it today you would lose (79.00) from holding Anhui Gujing Distillery or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Anhui Gujing Distillery
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Anhui Gujing Distillery |
Chengdu Kanghua and Anhui Gujing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Anhui Gujing
The main advantage of trading using opposite Chengdu Kanghua and Anhui Gujing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Anhui Gujing 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 Gujing will offset losses from the drop in Anhui Gujing's long position.| Chengdu Kanghua vs. Hangzhou Arcvideo Technology | Chengdu Kanghua vs. Citic Offshore Helicopter | Chengdu Kanghua vs. Zhejiang Huatong Meat | Chengdu Kanghua vs. Jiahe Foods Industry |
| Anhui Gujing vs. DO Home Collection | Anhui Gujing vs. Fibocom Wireless | Anhui Gujing vs. Zhangjiagang Freetrade Science | Anhui Gujing vs. Bloomage Biotechnology Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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