Correlation Between Anhui Huaheng and Sinofibers Technology
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Sinofibers Technology Co, you can compare the effects of market volatilities on Anhui Huaheng and Sinofibers Technology 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 Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Sinofibers Technology.
Diversification Opportunities for Anhui Huaheng and Sinofibers Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and Sinofibers is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers Technology 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 Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Sinofibers Technology
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Sinofibers Technology. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Huaheng Biotechnology is 1.11 times less risky than Sinofibers Technology. The stock trades about -0.38 of its potential returns per unit of risk. The Sinofibers Technology Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,980 in Sinofibers Technology Co on October 29, 2024 and sell it today you would lose (91.00) from holding Sinofibers Technology Co or give up 3.05% 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. Sinofibers Technology Co
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Sinofibers Technology |
Anhui Huaheng and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Sinofibers Technology
The main advantage of trading using opposite Anhui Huaheng and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology's long position.| Anhui Huaheng vs. China Petroleum Chemical | Anhui Huaheng vs. PetroChina Co Ltd | Anhui Huaheng vs. China State Construction | Anhui Huaheng vs. China Railway Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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