Correlation Between Anhui Conch and Country Garden
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and Country Garden 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 Country Garden 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 Country Garden Holdings, you can compare the effects of market volatilities on Anhui Conch and Country Garden 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 Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Country Garden.
Diversification Opportunities for Anhui Conch and Country Garden
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anhui and Country is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings 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 Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Anhui Conch i.e., Anhui Conch and Country Garden go up and down completely randomly.
Pair Corralation between Anhui Conch and Country Garden
Assuming the 90 days horizon Anhui Conch is expected to generate 24.99 times less return on investment than Country Garden. But when comparing it to its historical volatility, Anhui Conch Cement is 13.06 times less risky than Country Garden. It trades about 0.05 of its potential returns per unit of risk. Country Garden Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Country Garden Holdings on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Country Garden Holdings or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Conch Cement vs. Country Garden Holdings
Performance |
| Timeline |
| Anhui Conch Cement |
| Country Garden Holdings |
Anhui Conch and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Country Garden
The main advantage of trading using opposite Anhui Conch and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden's long position.| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
| Country Garden vs. HUMANA INC | Country Garden vs. SCOR PK | Country Garden vs. Aquagold International | Country Garden vs. Thrivent High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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