Correlation Between Changchun BCHT and Anhui Fuhuang
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By analyzing existing cross correlation between Changchun BCHT Biotechnology and Anhui Fuhuang Steel, you can compare the effects of market volatilities on Changchun BCHT and Anhui Fuhuang 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 Changchun BCHT with a short position of Anhui Fuhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun BCHT and Anhui Fuhuang.
Diversification Opportunities for Changchun BCHT and Anhui Fuhuang
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Changchun and Anhui is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Changchun BCHT Biotechnology and Anhui Fuhuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Fuhuang Steel and Changchun BCHT 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 Changchun BCHT Biotechnology are associated (or correlated) with Anhui Fuhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Fuhuang Steel has no effect on the direction of Changchun BCHT i.e., Changchun BCHT and Anhui Fuhuang go up and down completely randomly.
Pair Corralation between Changchun BCHT and Anhui Fuhuang
If you would invest 589.00 in Anhui Fuhuang Steel on November 9, 2024 and sell it today you would earn a total of 0.00 from holding Anhui Fuhuang Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.25% |
| Values | Daily Returns |
Changchun BCHT Biotechnology vs. Anhui Fuhuang Steel
Performance |
| Timeline |
| Changchun BCHT Biote |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Anhui Fuhuang Steel |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Changchun BCHT and Anhui Fuhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun BCHT and Anhui Fuhuang
The main advantage of trading using opposite Changchun BCHT and Anhui Fuhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun BCHT position performs unexpectedly, Anhui Fuhuang 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 Fuhuang will offset losses from the drop in Anhui Fuhuang's long position.The idea behind Changchun BCHT Biotechnology and Anhui Fuhuang Steel 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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