Correlation Between Anhui Conch and Enagas SA
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and Enagas SA 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 Enagas SA 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 Enagas SA, you can compare the effects of market volatilities on Anhui Conch and Enagas SA 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 Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Enagas SA.
Diversification Opportunities for Anhui Conch and Enagas SA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anhui and Enagas is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA 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 Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of Anhui Conch i.e., Anhui Conch and Enagas SA go up and down completely randomly.
Pair Corralation between Anhui Conch and Enagas SA
Assuming the 90 days horizon Anhui Conch Cement is expected to under-perform the Enagas SA. In addition to that, Anhui Conch is 2.37 times more volatile than Enagas SA. It trades about -0.18 of its total potential returns per unit of risk. Enagas SA is currently generating about -0.36 per unit of volatility. If you would invest 724.00 in Enagas SA on August 27, 2024 and sell it today you would lose (58.00) from holding Enagas SA or give up 8.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Conch Cement vs. Enagas SA
Performance |
| Timeline |
| Anhui Conch Cement |
| Enagas SA |
Anhui Conch and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Enagas SA
The main advantage of trading using opposite Anhui Conch and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Enagas SA 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 Enagas SA will offset losses from the drop in Enagas SA'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 |
| Enagas SA vs. NewJersey Resources | Enagas SA vs. Atmos Energy | Enagas SA vs. UGI Corporation | Enagas SA vs. Chesapeake Utilities |
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 Stocks Directory module to find actively traded stocks across global markets.
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