Correlation Between Anhui Huaheng and Fujian Longzhou
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Anhui Huaheng and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Fujian Longzhou.
Diversification Opportunities for Anhui Huaheng and Fujian Longzhou
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Anhui and Fujian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Fujian Longzhou
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Fujian Longzhou. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Huaheng Biotechnology is 1.23 times less risky than Fujian Longzhou. The stock trades about -0.04 of its potential returns per unit of risk. The Fujian Longzhou Transportation is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 479.00 in Fujian Longzhou Transportation on September 28, 2024 and sell it today you would lose (32.00) from holding Fujian Longzhou Transportation or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Fujian Longzhou Tran |
Anhui Huaheng and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Fujian Longzhou
The main advantage of trading using opposite Anhui Huaheng and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Anhui Huaheng vs. Industrial and Commercial | Anhui Huaheng vs. Agricultural Bank of | Anhui Huaheng vs. China Construction Bank | Anhui Huaheng vs. Bank of China |
| Fujian Longzhou vs. Chengdu Kanghua Biological | Fujian Longzhou vs. Beijing Wantai Biological | Fujian Longzhou vs. Suzhou Novoprotein Scientific | Fujian Longzhou vs. Aluminum Corp of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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