Correlation Between Inner Mongolia and Anhui Liuguo
Specify exactly 2 symbols:
By analyzing existing cross correlation between Inner Mongolia BaoTou and Anhui Liuguo Chemical, you can compare the effects of market volatilities on Inner Mongolia and Anhui Liuguo 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 Inner Mongolia with a short position of Anhui Liuguo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Anhui Liuguo.
Diversification Opportunities for Inner Mongolia and Anhui Liuguo
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inner and Anhui is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Anhui Liuguo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Liuguo Chemical and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Anhui Liuguo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Liuguo Chemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Anhui Liuguo go up and down completely randomly.
Pair Corralation between Inner Mongolia and Anhui Liuguo
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 1.65 times less return on investment than Anhui Liuguo. But when comparing it to its historical volatility, Inner Mongolia BaoTou is 1.59 times less risky than Anhui Liuguo. It trades about 0.04 of its potential returns per unit of risk. Anhui Liuguo Chemical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 519.00 in Anhui Liuguo Chemical on September 4, 2024 and sell it today you would earn a total of 108.00 from holding Anhui Liuguo Chemical or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Anhui Liuguo Chemical
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Anhui Liuguo Chemical |
Inner Mongolia and Anhui Liuguo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Anhui Liuguo
The main advantage of trading using opposite Inner Mongolia and Anhui Liuguo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Anhui Liuguo 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 Liuguo will offset losses from the drop in Anhui Liuguo's long position.| Inner Mongolia vs. Zijin Mining Group | Inner Mongolia vs. Wanhua Chemical Group | Inner Mongolia vs. Baoshan Iron Steel | Inner Mongolia vs. Rongsheng Petrochemical Co |
| Anhui Liuguo vs. Zijin Mining Group | Anhui Liuguo vs. Wanhua Chemical Group | Anhui Liuguo vs. Baoshan Iron Steel | Anhui Liuguo vs. Rongsheng Petrochemical 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |