Correlation Between Weichai Power and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Weichai Power 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 Weichai Power and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weichai Power and Anhui Conch Cement, you can compare the effects of market volatilities on Weichai Power 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 Weichai Power with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weichai Power and Anhui Conch.
Diversification Opportunities for Weichai Power and Anhui Conch
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weichai and Anhui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weichai Power 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 Weichai Power 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 Weichai Power 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 Weichai Power i.e., Weichai Power and Anhui Conch go up and down completely randomly.
Pair Corralation between Weichai Power and Anhui Conch
If you would invest 1,242 in Anhui Conch Cement on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Anhui Conch Cement or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Weichai Power vs. Anhui Conch Cement
Performance |
| Timeline |
| Weichai Power |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Anhui Conch Cement |
Weichai Power and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weichai Power and Anhui Conch
The main advantage of trading using opposite Weichai Power and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weichai Power 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.| Weichai Power vs. Shanghai Electric Group | Weichai Power vs. Xinjiang Goldwind Science | Weichai Power vs. Nordson | Weichai Power vs. CVD Equipment |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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