Correlation Between ANGANG STEEL and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER, you can compare the effects of market volatilities on ANGANG STEEL and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and MINCO SILVER.
Diversification Opportunities for ANGANG STEEL and MINCO SILVER
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANGANG and MINCO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and MINCO SILVER go up and down completely randomly.
Pair Corralation between ANGANG STEEL and MINCO SILVER
Assuming the 90 days trading horizon ANGANG STEEL is expected to generate 3.17 times less return on investment than MINCO SILVER. But when comparing it to its historical volatility, ANGANG STEEL H is 1.03 times less risky than MINCO SILVER. It trades about 0.01 of its potential returns per unit of risk. MINCO SILVER is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in MINCO SILVER on December 11, 2024 and sell it today you would earn a total of 0.00 from holding MINCO SILVER or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. MINCO SILVER
Performance |
| Timeline |
| ANGANG STEEL H |
| MINCO SILVER |
ANGANG STEEL and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and MINCO SILVER
The main advantage of trading using opposite ANGANG STEEL and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| ANGANG STEEL vs. China Eastern Airlines | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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