Correlation Between Anhui Jianghuai and Guangdong Advertising
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Guangdong Advertising Co, you can compare the effects of market volatilities on Anhui Jianghuai and Guangdong Advertising 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 Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Guangdong Advertising.
Diversification Opportunities for Anhui Jianghuai and Guangdong Advertising
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Guangdong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising 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 Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Guangdong Advertising
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to under-perform the Guangdong Advertising. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Jianghuai Automobile is 1.26 times less risky than Guangdong Advertising. The stock trades about -0.06 of its potential returns per unit of risk. The Guangdong Advertising Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Guangdong Advertising Co on August 31, 2024 and sell it today you would earn a total of 176.00 from holding Guangdong Advertising Co or generate 29.24% 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. Guangdong Advertising Co
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Guangdong Advertising |
Anhui Jianghuai and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Guangdong Advertising
The main advantage of trading using opposite Anhui Jianghuai and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| Anhui Jianghuai vs. China State Construction | Anhui Jianghuai vs. China Merchants Shekou | Anhui Jianghuai vs. Huafa Industrial Co | Anhui Jianghuai vs. China International Capital |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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