Correlation Between Basanite and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Basanite 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 Basanite and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basanite and Anhui Conch Cement, you can compare the effects of market volatilities on Basanite 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 Basanite with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basanite and Anhui Conch.
Diversification Opportunities for Basanite and Anhui Conch
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basanite and Anhui is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Basanite 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 Basanite 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 Basanite 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 Basanite i.e., Basanite and Anhui Conch go up and down completely randomly.
Pair Corralation between Basanite and Anhui Conch
Given the investment horizon of 90 days Basanite is expected to generate 3.91 times more return on investment than Anhui Conch. However, Basanite is 3.91 times more volatile than Anhui Conch Cement. It trades about 0.06 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.02 per unit of risk. If you would invest 4.50 in Basanite on August 27, 2024 and sell it today you would lose (0.50) from holding Basanite or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.87% |
| Values | Daily Returns |
Basanite vs. Anhui Conch Cement
Performance |
| Timeline |
| Basanite |
| Anhui Conch Cement |
Basanite and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basanite and Anhui Conch
The main advantage of trading using opposite Basanite and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basanite 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.| Basanite vs. Xinyi Glass Holdings | Basanite vs. CEMATRIX | Basanite vs. Anhui Conch Cement | Basanite vs. CEMEX SAB de |
| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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