Correlation Between Anhui Huaheng and Zhengzhou Qianweiyangchu
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Zhengzhou Qianweiyangchu Food, you can compare the effects of market volatilities on Anhui Huaheng and Zhengzhou Qianweiyangchu 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 Huaheng with a short position of Zhengzhou Qianweiyangchu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Zhengzhou Qianweiyangchu.
Diversification Opportunities for Anhui Huaheng and Zhengzhou Qianweiyangchu
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and Zhengzhou is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Zhengzhou Qianweiyangchu Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Qianweiyangchu and Anhui Huaheng 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 Huaheng Biotechnology are associated (or correlated) with Zhengzhou Qianweiyangchu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Qianweiyangchu has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and Zhengzhou Qianweiyangchu go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Zhengzhou Qianweiyangchu
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to generate 0.7 times more return on investment than Zhengzhou Qianweiyangchu. However, Anhui Huaheng Biotechnology is 1.43 times less risky than Zhengzhou Qianweiyangchu. It trades about -0.72 of its potential returns per unit of risk. Zhengzhou Qianweiyangchu Food is currently generating about -0.59 per unit of risk. If you would invest 3,582 in Anhui Huaheng Biotechnology on October 14, 2024 and sell it today you would lose (907.00) from holding Anhui Huaheng Biotechnology or give up 25.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Zhengzhou Qianweiyangchu Food
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Zhengzhou Qianweiyangchu |
Anhui Huaheng and Zhengzhou Qianweiyangchu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Zhengzhou Qianweiyangchu
The main advantage of trading using opposite Anhui Huaheng and Zhengzhou Qianweiyangchu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu will offset losses from the drop in Zhengzhou Qianweiyangchu's long position.| Anhui Huaheng vs. Jiangsu Broadcasting Cable | Anhui Huaheng vs. Gifore Agricultural Machinery | Anhui Huaheng vs. Chongqing Road Bridge | Anhui Huaheng vs. Shenzhen Zhongzhuang Construction |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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