Correlation Between Heilongjiang Transport and Fujian Anjoy
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By analyzing existing cross correlation between Heilongjiang Transport Development and Fujian Anjoy Foods, you can compare the effects of market volatilities on Heilongjiang Transport 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 Heilongjiang Transport with a short position of Fujian Anjoy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Fujian Anjoy.
Diversification Opportunities for Heilongjiang Transport and Fujian Anjoy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Fujian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop 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 Heilongjiang Transport 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 Heilongjiang Transport Development 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 Heilongjiang Transport i.e., Heilongjiang Transport and Fujian Anjoy go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Fujian Anjoy
Assuming the 90 days trading horizon Heilongjiang Transport Development is expected to generate 0.75 times more return on investment than Fujian Anjoy. However, Heilongjiang Transport Development is 1.33 times less risky than Fujian Anjoy. It trades about 0.2 of its potential returns per unit of risk. Fujian Anjoy Foods is currently generating about 0.13 per unit of risk. If you would invest 302.00 in Heilongjiang Transport Development on September 12, 2024 and sell it today you would earn a total of 103.00 from holding Heilongjiang Transport Development or generate 34.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Fujian Anjoy Foods
Performance |
| Timeline |
| Heilongjiang Transport |
| Fujian Anjoy Foods |
Heilongjiang Transport and Fujian Anjoy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Fujian Anjoy
The main advantage of trading using opposite Heilongjiang Transport and Fujian Anjoy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport 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 Heilongjiang Transport Development 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.
| Fujian Anjoy vs. Nanjing Putian Telecommunications | Fujian Anjoy vs. Tianjin Realty Development | Fujian Anjoy vs. Kangyue Technology Co | Fujian Anjoy vs. Shenzhen Hifuture Electric |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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