Correlation Between Asahi Kaisei and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Asahi Kaisei and Anhui Conch 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 Asahi Kaisei and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asahi Kaisei Corp and Anhui Conch Cement, you can compare the effects of market volatilities on Asahi Kaisei and Anhui Conch 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 Asahi Kaisei with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kaisei and Anhui Conch.
Diversification Opportunities for Asahi Kaisei and Anhui Conch
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asahi and Anhui is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Kaisei Corp and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and Asahi Kaisei 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 Asahi Kaisei Corp are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Asahi Kaisei i.e., Asahi Kaisei and Anhui Conch go up and down completely randomly.
Pair Corralation between Asahi Kaisei and Anhui Conch
Assuming the 90 days horizon Asahi Kaisei Corp is expected to generate 0.75 times more return on investment than Anhui Conch. However, Asahi Kaisei Corp is 1.33 times less risky than Anhui Conch. It trades about 0.11 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about -0.18 per unit of risk. If you would invest 1,359 in Asahi Kaisei Corp on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Asahi Kaisei Corp or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asahi Kaisei Corp vs. Anhui Conch Cement
Performance |
| Timeline |
| Asahi Kaisei Corp |
| Anhui Conch Cement |
Asahi Kaisei and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asahi Kaisei and Anhui Conch
The main advantage of trading using opposite Asahi Kaisei and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Kaisei position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Asahi Kaisei vs. Altech Batteries Limited | Asahi Kaisei vs. Alumifuel Pwr Corp | Asahi Kaisei vs. ASP Isotopes Common | Asahi Kaisei vs. AdvanSix |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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