Correlation Between Anhui Jianghuai and Yangmei Chemical
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Yangmei Chemical Co, you can compare the effects of market volatilities on Anhui Jianghuai and Yangmei 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 Yangmei Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Yangmei Chemical.
Diversification Opportunities for Anhui Jianghuai and Yangmei Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Yangmei is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Yangmei Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangmei Chemical 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 Yangmei Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangmei Chemical has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Yangmei Chemical go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Yangmei Chemical
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to under-perform the Yangmei Chemical. In addition to that, Anhui Jianghuai is 1.57 times more volatile than Yangmei Chemical Co. It trades about -0.1 of its total potential returns per unit of risk. Yangmei Chemical Co is currently generating about 0.12 per unit of volatility. If you would invest 234.00 in Yangmei Chemical Co on September 5, 2024 and sell it today you would earn a total of 16.00 from holding Yangmei Chemical Co or generate 6.84% 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. Yangmei Chemical Co
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Yangmei Chemical |
Anhui Jianghuai and Yangmei Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Yangmei Chemical
The main advantage of trading using opposite Anhui Jianghuai and Yangmei Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Yangmei 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 Yangmei Chemical will offset losses from the drop in Yangmei Chemical's long position.| Anhui Jianghuai vs. Guangzhou KingTeller Technology | Anhui Jianghuai vs. Keli Sensing Technology | Anhui Jianghuai vs. HUAQIN TECHNOLOGY LTD | Anhui Jianghuai vs. Soyea Technology Co |
| Yangmei Chemical vs. Sichuan Jinshi Technology | Yangmei Chemical vs. FSPG Hi Tech Co | Yangmei Chemical vs. Wuhan Yangtze Communication | Yangmei Chemical vs. Fujian Newland Computer |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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