Correlation Between Anhui Conch and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on Anhui Conch and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and ENN Energy.
Diversification Opportunities for Anhui Conch and ENN Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anhui and ENN is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Anhui Conch i.e., Anhui Conch and ENN Energy go up and down completely randomly.
Pair Corralation between Anhui Conch and ENN Energy
Assuming the 90 days horizon Anhui Conch Cement is expected to generate 0.8 times more return on investment than ENN Energy. However, Anhui Conch Cement is 1.26 times less risky than ENN Energy. It trades about -0.01 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.04 per unit of risk. If you would invest 1,686 in Anhui Conch Cement on November 9, 2024 and sell it today you would lose (344.00) from holding Anhui Conch Cement or give up 20.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Conch Cement vs. ENN Energy Holdings
Performance |
| Timeline |
| Anhui Conch Cement |
| ENN Energy Holdings |
Anhui Conch and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and ENN Energy
The main advantage of trading using opposite Anhui Conch and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy'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 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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