Correlation Between Anhui Jianghuai and Zhangjiagang Freetrade
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Zhangjiagang Freetrade Science, you can compare the effects of market volatilities on Anhui Jianghuai and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Zhangjiagang Freetrade.
Diversification Opportunities for Anhui Jianghuai and Zhangjiagang Freetrade
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Zhangjiagang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Zhangjiagang Freetrade Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangjiagang Freetrade 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 Zhangjiagang Freetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangjiagang Freetrade has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Zhangjiagang Freetrade go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Zhangjiagang Freetrade
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 1.75 times more return on investment than Zhangjiagang Freetrade. However, Anhui Jianghuai is 1.75 times more volatile than Zhangjiagang Freetrade Science. It trades about 0.08 of its potential returns per unit of risk. Zhangjiagang Freetrade Science is currently generating about 0.01 per unit of risk. If you would invest 1,365 in Anhui Jianghuai Automobile on September 13, 2024 and sell it today you would earn a total of 2,599 from holding Anhui Jianghuai Automobile or generate 190.4% 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. Zhangjiagang Freetrade Science
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Zhangjiagang Freetrade |
Anhui Jianghuai and Zhangjiagang Freetrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Zhangjiagang Freetrade
The main advantage of trading using opposite Anhui Jianghuai and Zhangjiagang Freetrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Zhangjiagang Freetrade 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 Zhangjiagang Freetrade will offset losses from the drop in Zhangjiagang Freetrade's long position.| Anhui Jianghuai vs. Beijing Sanyuan Foods | Anhui Jianghuai vs. Sichuan Fulin Transportation | Anhui Jianghuai vs. Dazhong Transportation Group | Anhui Jianghuai vs. Shandong Huifa Foodstuff |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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