Correlation Between James Hardie and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both James Hardie and Anhui Conch 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 James Hardie and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Hardie Industries and Anhui Conch Cement, you can compare the effects of market volatilities on James Hardie and Anhui Conch 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 James Hardie with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Hardie and Anhui Conch.
Diversification Opportunities for James Hardie and Anhui Conch
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between James and Anhui is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding James Hardie Industries and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and James Hardie 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 James Hardie Industries are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of James Hardie i.e., James Hardie and Anhui Conch go up and down completely randomly.
Pair Corralation between James Hardie and Anhui Conch
Considering the 90-day investment horizon James Hardie Industries is expected to under-perform the Anhui Conch. But the stock apears to be less risky and, when comparing its historical volatility, James Hardie Industries is 2.27 times less risky than Anhui Conch. The stock trades about 0.0 of its potential returns per unit of risk. The Anhui Conch Cement is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Anhui Conch Cement on October 26, 2024 and sell it today you would lose (7.00) from holding Anhui Conch Cement or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
James Hardie Industries vs. Anhui Conch Cement
Performance |
| Timeline |
| James Hardie Industries |
| Anhui Conch Cement |
James Hardie and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Hardie and Anhui Conch
The main advantage of trading using opposite James Hardie and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Hardie position performs unexpectedly, Anhui Conch 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 Conch will offset losses from the drop in Anhui Conch's long position.| James Hardie vs. Loma Negra Compania | James Hardie vs. Summit Materials | James Hardie vs. United States Lime | James Hardie vs. Eagle Materials |
| Anhui Conch vs. Xinyi Glass Holdings | Anhui Conch vs. PT Berkah Beton | Anhui Conch vs. Taiga Building Products | Anhui Conch vs. Xinyi Glass Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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