Correlation Between United States and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Lime and Anhui Conch Cement, you can compare the effects of market volatilities on United States 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 United States with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Anhui Conch.
Diversification Opportunities for United States and Anhui Conch
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Anhui is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding United States Lime 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 United States 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 United States Lime 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 United States i.e., United States and Anhui Conch go up and down completely randomly.
Pair Corralation between United States and Anhui Conch
Given the investment horizon of 90 days United States Lime is expected to generate 1.76 times more return on investment than Anhui Conch. However, United States is 1.76 times more volatile than Anhui Conch Cement. It trades about 0.41 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about -0.16 per unit of risk. If you would invest 10,703 in United States Lime on August 31, 2024 and sell it today you would earn a total of 4,676 from holding United States Lime or generate 43.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Lime vs. Anhui Conch Cement
Performance |
| Timeline |
| United States Lime |
| Anhui Conch Cement |
United States and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Anhui Conch
The main advantage of trading using opposite United States and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Smith Midland Corp | United States vs. Holcim | United States vs. Lafargeholcim Ltd ADR | United States vs. Cementos Pacasmayo SAA |
| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets |