Correlation Between ANHUI CONCH and FARO Technologies
Can any of the company-specific risk be diversified away by investing in both ANHUI CONCH and FARO Technologies 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 FARO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANHUI CH H and FARO Technologies, you can compare the effects of market volatilities on ANHUI CONCH and FARO Technologies 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 FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANHUI CONCH and FARO Technologies.
Diversification Opportunities for ANHUI CONCH and FARO Technologies
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANHUI and FARO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANHUI CH H and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies 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 CH H are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of ANHUI CONCH i.e., ANHUI CONCH and FARO Technologies go up and down completely randomly.
Pair Corralation between ANHUI CONCH and FARO Technologies
Assuming the 90 days trading horizon ANHUI CH H is expected to under-perform the FARO Technologies. In addition to that, ANHUI CONCH is 1.0 times more volatile than FARO Technologies. It trades about -0.06 of its total potential returns per unit of risk. FARO Technologies is currently generating about 0.07 per unit of volatility. If you would invest 2,500 in FARO Technologies on September 12, 2024 and sell it today you would earn a total of 80.00 from holding FARO Technologies or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ANHUI CH H vs. FARO Technologies
Performance |
| Timeline |
| ANHUI CONCH |
| FARO Technologies |
ANHUI CONCH and FARO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANHUI CONCH and FARO Technologies
The main advantage of trading using opposite ANHUI CONCH and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANHUI CONCH position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.| ANHUI CONCH vs. Perseus Mining Limited | ANHUI CONCH vs. Sabra Health Care | ANHUI CONCH vs. Natural Health Trends | ANHUI CONCH vs. MINCO SILVER |
| FARO Technologies vs. HEXAGON AB ADR1 | FARO Technologies vs. Superior Plus Corp | FARO Technologies vs. SIVERS SEMICONDUCTORS AB | FARO Technologies vs. NorAm Drilling AS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |