Correlation Between Fujian Anjoy and Guangdong Skychem
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By analyzing existing cross correlation between Fujian Anjoy Foods and Guangdong Skychem Technology, you can compare the effects of market volatilities on Fujian Anjoy and Guangdong Skychem 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 Fujian Anjoy with a short position of Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Anjoy and Guangdong Skychem.
Diversification Opportunities for Fujian Anjoy and Guangdong Skychem
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Guangdong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Anjoy Foods and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem and Fujian Anjoy 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 Fujian Anjoy Foods are associated (or correlated) with Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Fujian Anjoy i.e., Fujian Anjoy and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Fujian Anjoy and Guangdong Skychem
Assuming the 90 days trading horizon Fujian Anjoy is expected to generate 104.53 times less return on investment than Guangdong Skychem. But when comparing it to its historical volatility, Fujian Anjoy Foods is 1.56 times less risky than Guangdong Skychem. It trades about 0.0 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,028 in Guangdong Skychem Technology on November 8, 2024 and sell it today you would earn a total of 4,701 from holding Guangdong Skychem Technology or generate 155.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Anjoy Foods vs. Guangdong Skychem Technology
Performance |
| Timeline |
| Fujian Anjoy Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Skychem |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fujian Anjoy and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Anjoy and Guangdong Skychem
The main advantage of trading using opposite Fujian Anjoy and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Anjoy position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.The idea behind Fujian Anjoy Foods and Guangdong Skychem Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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