Correlation Between Anhui Conch and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both Anhui Conch and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials, you can compare the effects of market volatilities on Anhui Conch and Vulcan Materials 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 Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Vulcan Materials.
Diversification Opportunities for Anhui Conch and Vulcan Materials
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and Vulcan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials 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 Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of Anhui Conch i.e., Anhui Conch and Vulcan Materials go up and down completely randomly.
Pair Corralation between Anhui Conch and Vulcan Materials
Assuming the 90 days horizon Anhui Conch Cement is expected to under-perform the Vulcan Materials. In addition to that, Anhui Conch is 1.79 times more volatile than Vulcan Materials. It trades about 0.0 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.24 per unit of volatility. If you would invest 22,159 in Vulcan Materials on August 29, 2024 and sell it today you would earn a total of 5,041 from holding Vulcan Materials or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Anhui Conch Cement vs. Vulcan Materials
Performance |
| Timeline |
| Anhui Conch Cement |
| Vulcan Materials |
Anhui Conch and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Conch and Vulcan Materials
The main advantage of trading using opposite Anhui Conch and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| Anhui Conch vs. MHP Hotel AG | Anhui Conch vs. COVIVIO HOTELS INH | Anhui Conch vs. Cogent Communications Holdings | Anhui Conch vs. HYATT HOTELS A |
| Vulcan Materials vs. Daikin IndustriesLtd | Vulcan Materials vs. Anhui Conch Cement | Vulcan Materials vs. Superior Plus Corp | Vulcan Materials vs. NMI Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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