Correlation Between Wenzhou Kangning and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and ANGANG STEEL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wenzhou Kangning and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wenzhou Kangning Hospital and ANGANG STEEL H , you can compare the effects of market volatilities on Wenzhou Kangning and ANGANG STEEL 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 Wenzhou Kangning with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and ANGANG STEEL.
Diversification Opportunities for Wenzhou Kangning and ANGANG STEEL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wenzhou and ANGANG is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and Wenzhou Kangning 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 Wenzhou Kangning Hospital are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Wenzhou Kangning and ANGANG STEEL
Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the ANGANG STEEL. But the stock apears to be less risky and, when comparing its historical volatility, Wenzhou Kangning Hospital is 1.95 times less risky than ANGANG STEEL. The stock trades about -0.24 of its potential returns per unit of risk. The ANGANG STEEL H is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 18.00 in ANGANG STEEL H on October 11, 2024 and sell it today you would lose (1.00) from holding ANGANG STEEL H or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wenzhou Kangning Hospital vs. ANGANG STEEL H
Performance |
| Timeline |
| Wenzhou Kangning Hospital |
| ANGANG STEEL H |
Wenzhou Kangning and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wenzhou Kangning and ANGANG STEEL
The main advantage of trading using opposite Wenzhou Kangning and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| Wenzhou Kangning vs. WT OFFSHORE | Wenzhou Kangning vs. Richardson Electronics | Wenzhou Kangning vs. STORE ELECTRONIC | Wenzhou Kangning vs. Eidesvik Offshore ASA |
| ANGANG STEEL vs. FEMALE HEALTH | ANGANG STEEL vs. Wenzhou Kangning Hospital | ANGANG STEEL vs. UNIDOC HEALTH P | ANGANG STEEL vs. CeoTronics AG |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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