Correlation Between ANGANG STEEL and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on ANGANG STEEL and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and AIR PRODCHEMICALS.
Diversification Opportunities for ANGANG STEEL and AIR PRODCHEMICALS
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGANG and AIR is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between ANGANG STEEL and AIR PRODCHEMICALS
Assuming the 90 days trading horizon ANGANG STEEL is expected to generate 4.89 times less return on investment than AIR PRODCHEMICALS. In addition to that, ANGANG STEEL is 2.18 times more volatile than AIR PRODCHEMICALS. It trades about 0.0 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.04 per unit of volatility. If you would invest 25,887 in AIR PRODCHEMICALS on October 28, 2024 and sell it today you would earn a total of 5,243 from holding AIR PRODCHEMICALS or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| ANGANG STEEL H |
| AIR PRODCHEMICALS |
ANGANG STEEL and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and AIR PRODCHEMICALS
The main advantage of trading using opposite ANGANG STEEL and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| ANGANG STEEL vs. United Insurance Holdings | ANGANG STEEL vs. Apollo Investment Corp | ANGANG STEEL vs. CHRYSALIS INVESTMENTS LTD | ANGANG STEEL vs. MEDCAW INVESTMENTS LS 01 |
| AIR PRODCHEMICALS vs. Perdoceo Education | AIR PRODCHEMICALS vs. CHINA EDUCATION GROUP | AIR PRODCHEMICALS vs. Grand Canyon Education | AIR PRODCHEMICALS vs. Semiconductor Manufacturing International |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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