Correlation Between Shaanxi Construction and Anhui Huilong
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By analyzing existing cross correlation between Shaanxi Construction Machinery and Anhui Huilong Agricultural, you can compare the effects of market volatilities on Shaanxi Construction and Anhui Huilong 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 Shaanxi Construction with a short position of Anhui Huilong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Construction and Anhui Huilong.
Diversification Opportunities for Shaanxi Construction and Anhui Huilong
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Anhui is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Construction Machinery and Anhui Huilong Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huilong Agricu and Shaanxi Construction 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 Shaanxi Construction Machinery are associated (or correlated) with Anhui Huilong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huilong Agricu has no effect on the direction of Shaanxi Construction i.e., Shaanxi Construction and Anhui Huilong go up and down completely randomly.
Pair Corralation between Shaanxi Construction and Anhui Huilong
Assuming the 90 days trading horizon Shaanxi Construction Machinery is expected to under-perform the Anhui Huilong. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Construction Machinery is 1.54 times less risky than Anhui Huilong. The stock trades about -0.03 of its potential returns per unit of risk. The Anhui Huilong Agricultural is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 539.00 in Anhui Huilong Agricultural on September 4, 2024 and sell it today you would earn a total of 110.00 from holding Anhui Huilong Agricultural or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Construction Machinery vs. Anhui Huilong Agricultural
Performance |
| Timeline |
| Shaanxi Construction |
| Anhui Huilong Agricu |
Shaanxi Construction and Anhui Huilong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Construction and Anhui Huilong
The main advantage of trading using opposite Shaanxi Construction and Anhui Huilong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Construction position performs unexpectedly, Anhui Huilong 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 Huilong will offset losses from the drop in Anhui Huilong's long position.| Shaanxi Construction vs. Chengdu Kanghua Biological | Shaanxi Construction vs. Beijing Wantai Biological | Shaanxi Construction vs. Suzhou Novoprotein Scientific | Shaanxi Construction vs. Aluminum Corp of |
| Anhui Huilong vs. Zijin Mining Group | Anhui Huilong vs. Wanhua Chemical Group | Anhui Huilong vs. Baoshan Iron Steel | Anhui Huilong vs. Rongsheng Petrochemical Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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