Correlation Between China Resources and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both China Resources 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 China Resources and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Land and Anhui Conch Cement, you can compare the effects of market volatilities on China Resources 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 China Resources with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Anhui Conch.
Diversification Opportunities for China Resources and Anhui Conch
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Anhui is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Land 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 China Resources 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 China Resources Land 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 China Resources i.e., China Resources and Anhui Conch go up and down completely randomly.
Pair Corralation between China Resources and Anhui Conch
Assuming the 90 days horizon China Resources Land is expected to under-perform the Anhui Conch. In addition to that, China Resources is 1.42 times more volatile than Anhui Conch Cement. It trades about -0.01 of its total potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.05 per unit of volatility. If you would invest 1,164 in Anhui Conch Cement on August 31, 2024 and sell it today you would earn a total of 162.00 from holding Anhui Conch Cement or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
China Resources Land vs. Anhui Conch Cement
Performance |
| Timeline |
| China Resources Land |
| Anhui Conch Cement |
China Resources and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Anhui Conch
The main advantage of trading using opposite China Resources and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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.| China Resources vs. HUMANA INC | China Resources vs. SCOR PK | China Resources vs. Aquagold International | China Resources vs. Thrivent High Yield |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |