Correlation Between Tibet Huayu and Fujian Anjoy
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By analyzing existing cross correlation between Tibet Huayu Mining and Fujian Anjoy Foods, you can compare the effects of market volatilities on Tibet Huayu and Fujian Anjoy 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 Tibet Huayu with a short position of Fujian Anjoy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Fujian Anjoy.
Diversification Opportunities for Tibet Huayu and Fujian Anjoy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tibet and Fujian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Fujian Anjoy Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Anjoy Foods and Tibet Huayu 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 Tibet Huayu Mining are associated (or correlated) with Fujian Anjoy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Anjoy Foods has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Fujian Anjoy go up and down completely randomly.
Pair Corralation between Tibet Huayu and Fujian Anjoy
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.59 times more return on investment than Fujian Anjoy. However, Tibet Huayu is 1.59 times more volatile than Fujian Anjoy Foods. It trades about 0.38 of its potential returns per unit of risk. Fujian Anjoy Foods is currently generating about -0.17 per unit of risk. If you would invest 1,193 in Tibet Huayu Mining on November 7, 2024 and sell it today you would earn a total of 188.00 from holding Tibet Huayu Mining or generate 15.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Fujian Anjoy Foods
Performance |
| Timeline |
| Tibet Huayu Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fujian Anjoy Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tibet Huayu and Fujian Anjoy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Fujian Anjoy
The main advantage of trading using opposite Tibet Huayu and Fujian Anjoy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Fujian Anjoy 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 Fujian Anjoy will offset losses from the drop in Fujian Anjoy's long position.The idea behind Tibet Huayu Mining and Fujian Anjoy Foods 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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