Correlation Between ANGANG STEEL and MPH Health

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Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and MPH Health 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 ANGANG STEEL and MPH Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and MPH Health Care, you can compare the effects of market volatilities on ANGANG STEEL and MPH Health 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 ANGANG STEEL with a short position of MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and MPH Health.

Diversification Opportunities for ANGANG STEEL and MPH Health

ANGANGMPHDiversified AwayANGANGMPHDiversified Away100%
-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between ANGANG and MPH is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and MPH Health go up and down completely randomly.

Pair Corralation between ANGANG STEEL and MPH Health

Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 3.01 times more return on investment than MPH Health. However, ANGANG STEEL is 3.01 times more volatile than MPH Health Care. It trades about 0.1 of its potential returns per unit of risk. MPH Health Care is currently generating about -0.07 per unit of risk. If you would invest  17.00  in ANGANG STEEL H on November 20, 2024 and sell it today you would earn a total of  1.00  from holding ANGANG STEEL H or generate 5.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ANGANG STEEL H   vs.  MPH Health Care

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15GNV 93M1
       Timeline  
ANGANG STEEL H 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ANGANG STEEL H are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ANGANG STEEL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.170.1750.180.1850.19
MPH Health Care 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MPH Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.52323.52424.525

ANGANG STEEL and MPH Health Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.79-7.33-4.87-2.420.02.44.877.359.8312.31 0.050.100.15
JavaScript chart by amCharts 3.21.15GNV 93M1
       Returns  

Pair Trading with ANGANG STEEL and MPH Health

The main advantage of trading using opposite ANGANG STEEL and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.
The idea behind ANGANG STEEL H and MPH Health Care 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.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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