Correlation Between Anhui Conch and Basanite
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and Basanite at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Anhui Conch and Basanite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anhui Conch Cement and Basanite, you can compare the effects of market volatilities on Anhui Conch and Basanite 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 Conch with a short position of Basanite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Basanite.
Diversification Opportunities for Anhui Conch and Basanite
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anhui and Basanite is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Basanite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basanite and Anhui Conch 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 Conch Cement are associated (or correlated) with Basanite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basanite has no effect on the direction of Anhui Conch i.e., Anhui Conch and Basanite go up and down completely randomly.
Pair Corralation between Anhui Conch and Basanite
Assuming the 90 days horizon Anhui Conch is expected to generate 26.88 times less return on investment than Basanite. But when comparing it to its historical volatility, Anhui Conch Cement is 3.75 times less risky than Basanite. It trades about 0.02 of its potential returns per unit of risk. Basanite is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.90 in Basanite on October 26, 2024 and sell it today you would earn a total of 4.10 from holding Basanite or generate 455.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Conch Cement vs. Basanite
Performance |
| Timeline |
| Anhui Conch Cement |
| Basanite |
Anhui Conch and Basanite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Basanite
The main advantage of trading using opposite Anhui Conch and Basanite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Basanite 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 Basanite will offset losses from the drop in Basanite's long position.| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass Holdings |
| Basanite vs. Xinyi Glass Holdings | Basanite vs. CEMATRIX | Basanite vs. Anhui Conch Cement | Basanite vs. CEMEX SAB de |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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