Correlation Between Anhui Conch and CEMATRIX
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and CEMATRIX 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 CEMATRIX 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 CEMATRIX, you can compare the effects of market volatilities on Anhui Conch and CEMATRIX 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 CEMATRIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and CEMATRIX.
Diversification Opportunities for Anhui Conch and CEMATRIX
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and CEMATRIX is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX 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 CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Anhui Conch i.e., Anhui Conch and CEMATRIX go up and down completely randomly.
Pair Corralation between Anhui Conch and CEMATRIX
Assuming the 90 days horizon Anhui Conch Cement is expected to generate 1.0 times more return on investment than CEMATRIX. However, Anhui Conch Cement is 1.0 times less risky than CEMATRIX. It trades about 0.02 of its potential returns per unit of risk. CEMATRIX is currently generating about -0.06 per unit of risk. If you would invest 237.00 in Anhui Conch Cement on October 26, 2024 and sell it today you would lose (7.00) from holding Anhui Conch Cement or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Anhui Conch Cement vs. CEMATRIX
Performance |
| Timeline |
| Anhui Conch Cement |
| CEMATRIX |
Anhui Conch and CEMATRIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and CEMATRIX
The main advantage of trading using opposite Anhui Conch and CEMATRIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, CEMATRIX 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 CEMATRIX will offset losses from the drop in CEMATRIX'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 |
| CEMATRIX vs. Tecnoglass | CEMATRIX vs. Xinyi Glass Holdings | CEMATRIX vs. Anhui Conch Cement | CEMATRIX vs. Basanite |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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