Correlation Between Anhui Huaheng and Orinko Advanced
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Orinko Advanced Plastics, you can compare the effects of market volatilities on Anhui Huaheng and Orinko Advanced 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 Orinko Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Orinko Advanced.
Diversification Opportunities for Anhui Huaheng and Orinko Advanced
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anhui and Orinko is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Orinko Advanced Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orinko Advanced Plastics 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 Orinko Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orinko Advanced Plastics has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and Orinko Advanced go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Orinko Advanced
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Orinko Advanced. In addition to that, Anhui Huaheng is 1.11 times more volatile than Orinko Advanced Plastics. It trades about -0.05 of its total potential returns per unit of risk. Orinko Advanced Plastics is currently generating about 0.02 per unit of volatility. If you would invest 976.00 in Orinko Advanced Plastics on November 9, 2024 and sell it today you would earn a total of 154.00 from holding Orinko Advanced Plastics or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Orinko Advanced Plastics
Performance |
| Timeline |
| Anhui Huaheng Biotec |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Orinko Advanced Plastics |
Risk-Adjusted Performance
OK
Weak | Strong |
Anhui Huaheng and Orinko Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Orinko Advanced
The main advantage of trading using opposite Anhui Huaheng and Orinko Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, Orinko Advanced 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 Orinko Advanced will offset losses from the drop in Orinko Advanced's long position.The idea behind Anhui Huaheng Biotechnology and Orinko Advanced Plastics 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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