Correlation Between Anhui Huaheng and Arcutis Biotherapeutics
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Arcutis Biotherapeutics, you can compare the effects of market volatilities on Anhui Huaheng and Arcutis Biotherapeutics 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 Arcutis Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Arcutis Biotherapeutics.
Diversification Opportunities for Anhui Huaheng and Arcutis Biotherapeutics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anhui and Arcutis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Arcutis Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcutis Biotherapeutics 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 Arcutis Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcutis Biotherapeutics has no effect on the direction of Anhui Huaheng i.e., Anhui Huaheng and Arcutis Biotherapeutics go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Arcutis Biotherapeutics
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to under-perform the Arcutis Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Huaheng Biotechnology is 1.73 times less risky than Arcutis Biotherapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Arcutis Biotherapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,389 in Arcutis Biotherapeutics on December 4, 2024 and sell it today you would lose (8.00) from holding Arcutis Biotherapeutics or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.98% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Arcutis Biotherapeutics
Performance |
| Timeline |
| Anhui Huaheng Biotec |
| Arcutis Biotherapeutics |
Anhui Huaheng and Arcutis Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Arcutis Biotherapeutics
The main advantage of trading using opposite Anhui Huaheng and Arcutis Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng position performs unexpectedly, Arcutis Biotherapeutics 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 Arcutis Biotherapeutics will offset losses from the drop in Arcutis Biotherapeutics' long position.| Anhui Huaheng vs. Liuzhou Iron Steel | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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