Correlation Between Anhui Jianghuai and Lianhe Chemical
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Lianhe Chemical Technology, you can compare the effects of market volatilities on Anhui Jianghuai and Lianhe Chemical 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 Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Lianhe Chemical.
Diversification Opportunities for Anhui Jianghuai and Lianhe Chemical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Lianhe is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech 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 Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Lianhe Chemical
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to under-perform the Lianhe Chemical. In addition to that, Anhui Jianghuai is 1.9 times more volatile than Lianhe Chemical Technology. It trades about -0.04 of its total potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.05 per unit of volatility. If you would invest 589.00 in Lianhe Chemical Technology on September 16, 2024 and sell it today you would earn a total of 11.00 from holding Lianhe Chemical Technology or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Lianhe Chemical Tech |
Anhui Jianghuai and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Lianhe Chemical
The main advantage of trading using opposite Anhui Jianghuai and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Anhui Jianghuai vs. Cambricon Technologies Corp | Anhui Jianghuai vs. Loongson Technology Corp | Anhui Jianghuai vs. Shenzhen Fortune Trend | Anhui Jianghuai vs. Chongqing Road Bridge |
| Lianhe Chemical vs. Xiamen Goldenhome Co | Lianhe Chemical vs. Vohringer Home Technology | Lianhe Chemical vs. Inspur Software Co | Lianhe Chemical vs. Fujian Rongji Software |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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