Correlation Between Pengxin International and Anhui Transport
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By analyzing existing cross correlation between Pengxin International Mining and Anhui Transport Consulting, you can compare the effects of market volatilities on Pengxin International and Anhui Transport 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 Pengxin International with a short position of Anhui Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Anhui Transport.
Diversification Opportunities for Pengxin International and Anhui Transport
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pengxin and Anhui is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Anhui Transport Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Transport Cons and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Anhui Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Transport Cons has no effect on the direction of Pengxin International i.e., Pengxin International and Anhui Transport go up and down completely randomly.
Pair Corralation between Pengxin International and Anhui Transport
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 3.29 times more return on investment than Anhui Transport. However, Pengxin International is 3.29 times more volatile than Anhui Transport Consulting. It trades about 0.18 of its potential returns per unit of risk. Anhui Transport Consulting is currently generating about 0.06 per unit of risk. If you would invest 305.00 in Pengxin International Mining on November 8, 2024 and sell it today you would earn a total of 31.00 from holding Pengxin International Mining or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Anhui Transport Consulting
Performance |
| Timeline |
| Pengxin International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Anhui Transport Cons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pengxin International and Anhui Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Anhui Transport
The main advantage of trading using opposite Pengxin International and Anhui Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Anhui Transport 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 Anhui Transport will offset losses from the drop in Anhui Transport's long position.The idea behind Pengxin International Mining and Anhui Transport Consulting pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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