Correlation Between Anhui Jianghuai and Beijing Shunxin
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Beijing Shunxin Agriculture, you can compare the effects of market volatilities on Anhui Jianghuai and Beijing Shunxin 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 Jianghuai with a short position of Beijing Shunxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Beijing Shunxin.
Diversification Opportunities for Anhui Jianghuai and Beijing Shunxin
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Beijing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Beijing Shunxin Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shunxin Agri and Anhui Jianghuai 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 Jianghuai Automobile are associated (or correlated) with Beijing Shunxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shunxin Agri has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Beijing Shunxin go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Beijing Shunxin
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 1.31 times more return on investment than Beijing Shunxin. However, Anhui Jianghuai is 1.31 times more volatile than Beijing Shunxin Agriculture. It trades about 0.07 of its potential returns per unit of risk. Beijing Shunxin Agriculture is currently generating about -0.02 per unit of risk. If you would invest 1,621 in Anhui Jianghuai Automobile on October 18, 2024 and sell it today you would earn a total of 2,199 from holding Anhui Jianghuai Automobile or generate 135.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Beijing Shunxin Agriculture
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Beijing Shunxin Agri |
Anhui Jianghuai and Beijing Shunxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Beijing Shunxin
The main advantage of trading using opposite Anhui Jianghuai and Beijing Shunxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Beijing Shunxin 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 Beijing Shunxin will offset losses from the drop in Beijing Shunxin's long position.| Anhui Jianghuai vs. Agricultural Bank of | Anhui Jianghuai vs. Industrial and Commercial | Anhui Jianghuai vs. Bank of China | Anhui Jianghuai vs. PetroChina Co Ltd |
| Beijing Shunxin vs. Chongqing Changan Automobile | Beijing Shunxin vs. Songz Automobile Air | Beijing Shunxin vs. Dongfeng Automobile Co | Beijing Shunxin vs. Anhui Jianghuai Automobile |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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