Correlation Between Anhui Transport and China Vanke
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By analyzing existing cross correlation between Anhui Transport Consulting and China Vanke Co, you can compare the effects of market volatilities on Anhui Transport and China Vanke 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 Anhui Transport with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Transport and China Vanke.
Diversification Opportunities for Anhui Transport and China Vanke
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and China is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Transport Consulting and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and Anhui 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 Anhui Transport Consulting are associated (or correlated) with China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of Anhui Transport i.e., Anhui Transport and China Vanke go up and down completely randomly.
Pair Corralation between Anhui Transport and China Vanke
Assuming the 90 days trading horizon Anhui Transport Consulting is expected to under-perform the China Vanke. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Transport Consulting is 3.25 times less risky than China Vanke. The stock trades about -0.02 of its potential returns per unit of risk. The China Vanke Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 698.00 in China Vanke Co on November 7, 2024 and sell it today you would earn a total of 29.00 from holding China Vanke Co or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Transport Consulting vs. China Vanke Co
Performance |
| Timeline |
| Anhui Transport Cons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Vanke |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anhui Transport and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Transport and China Vanke
The main advantage of trading using opposite Anhui Transport and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Transport position performs unexpectedly, China Vanke 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 China Vanke will offset losses from the drop in China Vanke's long position.The idea behind Anhui Transport Consulting and China Vanke Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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