Correlation Between Anhui Conch and James Hardie
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and James Hardie 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 James Hardie 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 James Hardie Industries, you can compare the effects of market volatilities on Anhui Conch and James Hardie 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 James Hardie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and James Hardie.
Diversification Opportunities for Anhui Conch and James Hardie
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anhui and James is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and James Hardie Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Hardie Industries 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 James Hardie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Hardie Industries has no effect on the direction of Anhui Conch i.e., Anhui Conch and James Hardie go up and down completely randomly.
Pair Corralation between Anhui Conch and James Hardie
Assuming the 90 days horizon Anhui Conch Cement is expected to generate 1.74 times more return on investment than James Hardie. However, Anhui Conch is 1.74 times more volatile than James Hardie Industries. It trades about 0.05 of its potential returns per unit of risk. James Hardie Industries is currently generating about 0.0 per unit of risk. If you would invest 209.00 in Anhui Conch Cement on September 14, 2024 and sell it today you would earn a total of 75.00 from holding Anhui Conch Cement or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.39% |
| Values | Daily Returns |
Anhui Conch Cement vs. James Hardie Industries
Performance |
| Timeline |
| Anhui Conch Cement |
| James Hardie Industries |
Anhui Conch and James Hardie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and James Hardie
The main advantage of trading using opposite Anhui Conch and James Hardie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, James Hardie 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 James Hardie will offset losses from the drop in James Hardie'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 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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