Correlation Between Ford and Anhui Huaren
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By analyzing existing cross correlation between Ford Motor and Anhui Huaren Health, you can compare the effects of market volatilities on Ford and Anhui Huaren 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 Ford with a short position of Anhui Huaren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Anhui Huaren.
Diversification Opportunities for Ford and Anhui Huaren
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Anhui is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Anhui Huaren Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaren Health and Ford 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 Ford Motor are associated (or correlated) with Anhui Huaren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaren Health has no effect on the direction of Ford i.e., Ford and Anhui Huaren go up and down completely randomly.
Pair Corralation between Ford and Anhui Huaren
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Anhui Huaren. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.8 times less risky than Anhui Huaren. The stock trades about -0.15 of its potential returns per unit of risk. The Anhui Huaren Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,113 in Anhui Huaren Health on November 21, 2024 and sell it today you would earn a total of 75.00 from holding Anhui Huaren Health or generate 6.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 76.19% |
Values | Daily Returns |
Ford Motor vs. Anhui Huaren Health
Performance |
Timeline |
Ford Motor |
Anhui Huaren Health |
Ford and Anhui Huaren Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Anhui Huaren
The main advantage of trading using opposite Ford and Anhui Huaren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Anhui Huaren 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 Huaren will offset losses from the drop in Anhui Huaren's long position.The idea behind Ford Motor and Anhui Huaren Health 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 Huaren vs. Shanghai Rightongene Biotechnology | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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