Correlation Between Culp and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Culp 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 Culp and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Culp Inc and Anhui Conch Cement, you can compare the effects of market volatilities on Culp 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 Culp with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Culp and Anhui Conch.
Diversification Opportunities for Culp and Anhui Conch
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Culp and Anhui is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Culp Inc 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 Culp 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 Culp Inc 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 Culp i.e., Culp and Anhui Conch go up and down completely randomly.
Pair Corralation between Culp and Anhui Conch
Given the investment horizon of 90 days Culp Inc is expected to generate 0.84 times more return on investment than Anhui Conch. However, Culp Inc is 1.19 times less risky than Anhui Conch. It trades about 0.01 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.0 per unit of risk. If you would invest 495.00 in Culp Inc on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Culp Inc or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Culp Inc vs. Anhui Conch Cement
Performance |
| Timeline |
| Culp Inc |
| Anhui Conch Cement |
Culp and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Culp and Anhui Conch
The main advantage of trading using opposite Culp and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Culp 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.The idea behind Culp Inc and Anhui Conch Cement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 CEOs Directory module to screen CEOs from public companies around the world.
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