Correlation Between ANGANG STEEL and Hon Hai
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Hon Hai 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 Hon Hai 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 Hon Hai Precision, you can compare the effects of market volatilities on ANGANG STEEL and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Hon Hai.
Diversification Opportunities for ANGANG STEEL and Hon Hai
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGANG and Hon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Hon Hai go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Hon Hai
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.34 times more return on investment than Hon Hai. However, ANGANG STEEL is 1.34 times more volatile than Hon Hai Precision. It trades about -0.03 of its potential returns per unit of risk. Hon Hai Precision is currently generating about -0.09 per unit of risk. If you would invest 18.00 in ANGANG STEEL H on October 11, 2024 and sell it today you would lose (1.00) from holding ANGANG STEEL H or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Hon Hai Precision
Performance |
| Timeline |
| ANGANG STEEL H |
| Hon Hai Precision |
ANGANG STEEL and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Hon Hai
The main advantage of trading using opposite ANGANG STEEL and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| ANGANG STEEL vs. FEMALE HEALTH | ANGANG STEEL vs. Wenzhou Kangning Hospital | ANGANG STEEL vs. UNIDOC HEALTH P | ANGANG STEEL vs. CeoTronics AG |
| Hon Hai vs. SYSTEMAIR AB | Hon Hai vs. Mitsui Chemicals | Hon Hai vs. MCEWEN MINING INC | Hon Hai vs. GRIFFIN MINING LTD |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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