Correlation Between Shandong Huifa and Anhui Jianghuai
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By analyzing existing cross correlation between Shandong Huifa Foodstuff and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Shandong Huifa and Anhui Jianghuai 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 Shandong Huifa with a short position of Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Huifa and Anhui Jianghuai.
Diversification Opportunities for Shandong Huifa and Anhui Jianghuai
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Anhui is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Huifa Foodstuff and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto and Shandong Huifa 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 Shandong Huifa Foodstuff are associated (or correlated) with Anhui Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of Shandong Huifa i.e., Shandong Huifa and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Shandong Huifa and Anhui Jianghuai
Assuming the 90 days trading horizon Shandong Huifa Foodstuff is expected to generate 1.32 times more return on investment than Anhui Jianghuai. However, Shandong Huifa is 1.32 times more volatile than Anhui Jianghuai Automobile. It trades about 0.42 of its potential returns per unit of risk. Anhui Jianghuai Automobile is currently generating about -0.12 per unit of risk. If you would invest 1,019 in Shandong Huifa Foodstuff on September 14, 2024 and sell it today you would earn a total of 582.00 from holding Shandong Huifa Foodstuff or generate 57.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Huifa Foodstuff vs. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Shandong Huifa Foodstuff |
| Anhui Jianghuai Auto |
Shandong Huifa and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Huifa and Anhui Jianghuai
The main advantage of trading using opposite Shandong Huifa and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Huifa position performs unexpectedly, Anhui Jianghuai 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 Anhui Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| Shandong Huifa vs. Nanjing Putian Telecommunications | Shandong Huifa vs. Tianjin Realty Development | Shandong Huifa vs. Kangyue Technology Co | Shandong Huifa vs. Shenzhen Hifuture Electric |
| Anhui Jianghuai vs. Nanya New Material | Anhui Jianghuai vs. Changchun Faway Automobile | Anhui Jianghuai vs. Ningbo Fangzheng Automobile | Anhui Jianghuai vs. Cicc Fund Management |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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