Correlation Between Anhui Transport and Shantui Construction
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By analyzing existing cross correlation between Anhui Transport Consulting and Shantui Construction Machinery, you can compare the effects of market volatilities on Anhui Transport and Shantui Construction 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 Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Transport and Shantui Construction.
Diversification Opportunities for Anhui Transport and Shantui Construction
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Shantui is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Transport Consulting and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction 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 Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Anhui Transport i.e., Anhui Transport and Shantui Construction go up and down completely randomly.
Pair Corralation between Anhui Transport and Shantui Construction
Assuming the 90 days trading horizon Anhui Transport is expected to generate 19.31 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Anhui Transport Consulting is 1.38 times less risky than Shantui Construction. It trades about 0.02 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 839.00 in Shantui Construction Machinery on August 29, 2024 and sell it today you would earn a total of 175.00 from holding Shantui Construction Machinery or generate 20.86% 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. Shantui Construction Machinery
Performance |
| Timeline |
| Anhui Transport Cons |
| Shantui Construction |
Anhui Transport and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Transport and Shantui Construction
The main advantage of trading using opposite Anhui Transport and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Transport position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Anhui Transport vs. Agricultural Bank of | Anhui Transport vs. Industrial and Commercial | Anhui Transport vs. Bank of China | Anhui Transport vs. China Construction Bank |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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