Correlation Between Anhui Huaren and Chongqing Brewery
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By analyzing existing cross correlation between Anhui Huaren Health and Chongqing Brewery Co, you can compare the effects of market volatilities on Anhui Huaren and Chongqing Brewery 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 Huaren with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaren and Chongqing Brewery.
Diversification Opportunities for Anhui Huaren and Chongqing Brewery
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Chongqing is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaren Health and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Anhui Huaren 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 Huaren Health are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Anhui Huaren i.e., Anhui Huaren and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Anhui Huaren and Chongqing Brewery
Assuming the 90 days trading horizon Anhui Huaren Health is expected to generate 1.28 times more return on investment than Chongqing Brewery. However, Anhui Huaren is 1.28 times more volatile than Chongqing Brewery Co. It trades about 0.12 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.14 per unit of risk. If you would invest 986.00 in Anhui Huaren Health on September 12, 2024 and sell it today you would earn a total of 248.00 from holding Anhui Huaren Health or generate 25.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaren Health vs. Chongqing Brewery Co
Performance |
| Timeline |
| Anhui Huaren Health |
| Chongqing Brewery |
Anhui Huaren and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaren and Chongqing Brewery
The main advantage of trading using opposite Anhui Huaren and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaren position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Anhui Huaren vs. Ming Yang Smart | Anhui Huaren vs. 159681 | Anhui Huaren vs. 159005 | Anhui Huaren vs. Loctek Ergonomic Technology |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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